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Low Seasonal Demand Impedes Steel Price Growth in Emerging Markets

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Low Seasonal Demand Impedes Steel Price Growth in Emerging Markets
Latest company news about Low Seasonal Demand Impedes Steel Price Growth in Emerging Markets

The prognosis for the Brazilian steel market is unchanged. Distributors plan to persevere with conservative inventory levels, reflecting a seasonal slowdown in end-user demand. Shipments to companies in construction related activities is weak. Steel price support from export demand is limited.

In Russia, steel consuming engineering and manufacturing firms are reluctant to increase production capacity in the absence of sustainable end-user demand. Construction-related sales are fragile. Traditionally, the Russian market is quiet during the summer vacation months.

The Indian steel market is described as “slow”. The business climate is being negatively affected by the monsoon season. Distributors see no indications of an imminent pickup in demand. Pressure is growing, for these firms, to liquidate inventory, to minimise potential losses. Building activity is muted and unlikely to improve, due to heavy rainfall and flooding. The mills are targeting overseas markets to offload their surplus output.

Difficult trading conditions persist, in China. Service centres are still reluctant to conclude contracts. Weak end-user demand is offsetting the impact of a new round of production restrictions, in several parts of the country. Heavy rainfall is also curbing construction related activity.

Ukrainian steel demand is tepid – weighed down by the country’s parliamentary elections. Construction-related activity is slow. The export market is very competitive. The local association of metal producers, Metallurgprom, reports that finished steel production, in June 2019, totalled 1.5 million tonnes – down 13.8 percent, month-on-month.

Turkish service centres and steel traders are wary of carrying too much inventory during the summer months. They note that it is risky to conclude any deals, at present, because of instability of the Turkish lira against the US dollar and volatile import price quotations. The slowdown in the real estate market is a growing concern. Meanwhile, shipments to automotive part manufacturers are forecast to decline next month, owing to scheduled summer maintenance work. Demand from overseas customers is weak.

Procurement activity is lethargic, in the United Arab Emirates. Distributors are booking for only immediate requirements. Inventories are low-to-normal. MEPS’ research reveals no discernible improvement in downstream demand. Traditionally, construction related activity is limited by the hot weather conditions in August and September. Export opportunities are restricted outside the GCC region.

Business sentiment is lacklustre, in the South African steel market. Domestic buyers remark that their suppliers’ current initiatives to lift steel prices are ill-timed and counterproductive. Any further steel price hikes are forecast to be modest, due to underlying weakness in downstream demand and relatively high inventory levels.

The outlook for the Mexican steel market is unchanged. Producers considered implementing a domestic price advance, but, so far, this has not proved possible. Independent stockists opted to defer purchasing activities, finding the current pricing environment unworkable. Import offers from third country suppliers are, generally, considered uncompetitive, when compared with the steel prices that can be negotiated with local mills.

Pub Time : 2019-08-01 14:35:36 >> News list
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