UK based MEPS said that in the Russian Federation, shipments to domestic customers have continued to exhibit signs of improvement. However, sales volumes remain 15% to 20% below pre recession levels. Official 3A scrap purchasing prices have remained volatile. All of this has fuelled expectations that domestic steelmakers are contemplating another round of price increases. Attention is now being focused on export prices. These figures will give buyers some indication of future selling values.
The general prospects of the Ukrainian steel industry have remained unchanged. Domestic metallurgical plants are expected to face challenging trading conditions. Most have working capital problems. ArcelorMittal Kriviy Rih has recently received a portion of its un-refunded value added tax receipts in the form of bonds. The EU’s competition authority has cleared the proposed merger between Metinvest and Ilyich Iron and Steel Works of Mariupol. In another development, Zaporizhstal has attempted to invalidate an iron ore contract with one of Metinvest’s mining and processing units.
Trading conditions in the Turkish market have failed to live up to expectations. Long product producers had forecast stronger sales volumes in the post Eid period, and adjusted their domestic quotations accordingly. The upward movement covered the additional purchasing cost of ferrous scrap and billet. Flat products steelmakers have also reported similar trends. Ex works prices are firm and may rise further if supply remains tight. Erdemir is planning to re start its plate mill in October 2010.
The Indian steel industry has begun to lay the ground work for the festival season and the resumption of construction activity. The majors issued a price hike in early September. The adjustment was blamed on escalating production costs. However, their customers are not in a strong position to absorb their new figures. Re-rollers have passed on the additional costs. Traders are now starting to rebuild inventories.
Purchasing activity in the United Arab Emirates has been dull. Construction companies in the Gulf State are only buying small bundles of material. Booking activity in August, however, was stronger than expected. The post-Eid market conditions have not deterred foreign suppliers from lifting their quotations. Several traders are concerned that the erratic stop start buying activity witnessed this year could linger on into 2011. Local stockists are not expected to make any big purchases in the next few months.
Trading conditions in South Africa have shown little sign of improvement. Procurement by the manufacturing sector has remained lethargic. The construction sector has been held up by weak economic fundamentals. Local distributors have found it difficult to manage their inventories. Restocking is limited due to the sporadic nature of purchasing activity. ArcelorMittal South Africa kept its prices for flat and long steel products unchanged in September 2010.
Brazilian producers are now actively trying to discourage the importation of steel material. The inflow has been rising on a near monthly basis in 2010. Majors have lowered their flat product selling figures to distributors. The reduction is unlikely to be passed on to end-users. Most stockists are holding inventory that was procured three months ago at higher prices. There are also concerns that the market is oversupplied. The uncertainty has led to several buyers moving to the sidelines.
Production levels have continued to linger below pre crisis levels in Mexico. Shipments to the construction and heavy manufacturing sectors have not dramatically improved. This is mainly due to inventories being above ideal levels. Local steelmakers and distributors have responded with lower selling figures for some products.