/Rusmet.ru, Victor Tarnavskiy / By the end of Jan. the prices increase in global steel market slowed; the quotations in some regions even went down. Nevertheless most steel producers believe that the market has not used its potential yet and count on the growth continuation.
The important role in the maintenance of these expectations is played by the US steel market. According to many analysts another increase is expected there in Feb. Even relative stability of national scrap market in current month may not prevent the US metallurgists from another prices increase, at least for flat steel. (In the USA the share of scrap in the furnace charge is one of the highest in the world, even at the integrated plants).
In the beginning of Feb. the price for HRC at the eastern coast and in the mid-west states amounted averagely $650-670 per Mt EXW; CRC price amounted $770-795 per ton EXW. Basic prices for galvanized steel amounted $795-815 per ton EXW. Manufacturers offered HR steel for March at $630 per a short ton ($694 per Mt) EXW. CR steel quotations were averagely $720 per a short ton ($794 per Mt). Thus, in this market the suppliers have almost reached what they wanted.
According to the results of a poll, held by the US Institute of Supply Management, the mood of many market participants has changed. Thus, 25% of the companies are going to hire new employees in the nearest three months. This is the highest figure since Sep. 2008, i.e. since the beginning of the crisis. The share of those who expect business activity improvement in the nearest half-year has reached 50%, for the first time since summer 2009. More than one-third of the US rolled steel consumers planned to refill their stockpiles in Jan. against 21% in Dec. Last time the US companies allocated such funds for the stockpiles since summer 2009, when the crisis peak seemed to be passed.
Then those expectations did not come true, but now Institute of Supply Management notices the highest growth of industrial activity since Aug. 2004. In the USA tubes and pipes output started increasing, as the result of the antidumping duties against Chinese competitors. There is progress in automotive industry. Some US metallurgical companies note orders number increase in recent several weeks. Steel output in the USA in Jan. reached 6.07mio tons (excl. Jan. 31) which is up 53.6% on the previous year.
However, these facts refer to the US flat steel market. The situation in the US construction steel products is worse. The US rebar manufacturers managed to increase the prices to about $575-585 per Mt EXW by the beginning of the second part of Feb., but that is it. The US government on the Feb. 1 announced its plans to “freeze” non-strategic domestic irregular programs in the state budget. The economy victim is the US space program. But what is more important for steel manufacturers is that most federal construction projects are subject to sequestrum. Besides, in spring 2010 the government intends to cease national real estate market support. In this connection the analysts forecast that the depression in the US construction steel market will continue during 2010 and will terminate perhaps in 2011. The worst situation is in steel beams market, however this sector is the most depressive in Europe as well.
Turkish companies in Jan. offered few quantities of rebars to the US buyers. In the beginning of Feb. rebar prices amounted about $550-560 per ton FOT. But the consumers were not much interested.
At the same time flat steel export to the USA is growing slowly. In the beginning of Feb. the US sources said about the promotion of Russian HR flat steel in local market at $615-640 per ton CFR FO with tax paid. CR steel from Russia, Brazil, and China were offered at $750-770 per ton. However, the interest of the US consumers to the imported products is not high enough. In Jan. the US customs authorities noticed the increase of steel products import licenses applications by 10-12 % comparing to Dec. But this growth happened mostly at the tubes and pipes account.