Traditionally billet prices have been the barometer for steel market. The movement of its prices is progenitor of trends in other products. In the post recessionary era many a times this dictum has been maintained. However in the recent past the dynamics have gone haywire succumbing to the onslaughts of array of political insurrection and natural calamities.
The current run of political crisis in MENA nations has left an indelible mark on the happenings in this region. MENA region being the prime consumers of billets and downstream long products has proved to be the bete noire. It is undeniable that the Middle East market never regained its prime after the recession. More so the apathy has been embellished recently in the aftermath of political crisis. The residual oases of Egypt etc have been parched by the crisis.
Meanwhile the mills in Turkey and CIS which were peaking production riding high on resurgent demand and runaway scrap prices after the New Year break were taken off guard with the sudden collapse of demand . The surplus volume deluged the market sinking the levels. The impact was magnified in Turkey vis-à-vis CIS since former are the major players in this region. Egypt alone which used to import nearly 150,000 tonnes of rebar from Turkey became inaccessible. Like wise other nations viz, Libya, Algeria and Qatar too reeled under similar crisis highlighting pessimism and uncertainty in the market. Iran meanwhile groaning under financial sanctions imposed by US was always handicapped. The interlude of Iranian New Year diminished the demand further.
European market another natural destination for Turkish mills too remained subdued after the initial flourish and is yet to redeem properly. Cumulatively the depression exerted with a thud on the levels.
The Ukrainian mills meanwhile already ecstatic with dizzying levels touching almost USD 650 per tonne with mills loaded for nearly 45 days remained obdurate bulking by USD 10 per tonne to USD 20 per tonne only.
But the rebar prices bore bulk of the brunt plummeting by nearly USD 40 per tonne to USD 50 per tonne from Turkey and USD 20 per tonne from Black Sea port squeezing the gap between billet and rebar. At the same time international scrap prices remained stable at levels of USD 440 per tonne to USD 460 per tonne disallowing elbow room to mills in Turkey.
Although any price improvement seems merely cosmetic in the present milieu there have been definite signs of improvement at the Black Sea by USD 10 per tonne to USD 20 per tonne during last week. However the same is not replicated in Turkish waters. With the European long product market having bottomed out and the Egyptian demand attaining modicum of stability some flicker visible, which will have to survive the recurrent breeze of market vacillation.
Major Ukrainian mills are booked at least for a month, albeit Turkish levels still continues to languish with depleting scrap levels taking the wings away. The coming days is expected to witness minor revival in fortunes for stock replenishment in Europe and parts Middle East but the monster of position cargoes continues to haunt the operators.
( Source: www.steelguru.com )