Steel prices decline in BRIC countries on falling consumption

Metal Recycling News  |  2012-01-27 05:55:58   |   By

Declining consumption and continuing Eurozone debt crisis has impacted the steel market in BRIC nations with average transaction prices declining for all eight carbon steel product forms researched, according to a report from MEPS International

LONDON (Scrap Monster): Declining consumption and continuing Eurozone debt crisis has impacted the steel market in BRIC nations with average transaction prices declining for all eight carbon steel product forms researched, according to a report from MEPS International

The downward movement varied between 1.4 percent for medium sections and 3.8 percent for hot rolled coil., MEPS International report added.

Brazilian steelmakers are finding it difficult to fill order books. Underlying consumption has fallen short of industry projections. This has fuelled expectations of price stability in the January/March period. Market sentiment in Mexico has been undermined by price volatility and economic uncertainty. Distributors have found the latest transaction values unattractive.

Purchasing activity has stagnated in the Russian Federation. Domestic steelmakers downgraded selling figures for several steel products. Ukrainian steel consumption has been deflated by the country’s strict credit conditions. Traders plan to postpone purchases until the domestic pricing scenario is more transparent.

Indian distributors contend that the latest domestic price levels are not supported by market and economic fundamentals. Steelmakers without captive iron ore mining assets have welcomed the government's decision to impose 30 percent duty on exports. The foreign trade has been blamed for stifling domestic competition and lifting production costs.

Difficult trading conditions persist in Turkey. Market sentiment has been eroded by the EU sovereign debt crisis and unfavourable weather conditions. Construction activity is not expected to improve until weeks 8 and 9. End-users intend to steer clear of large flat product purchases in the interim. Price competition has intensified amongst steelmakers and distributors.

The outlook for the United Arab Emirates’ steel market is unchanged. Stockists intend to persevere with conservative inventory levels, following low import quotations and an uncertain global economic climate. Shipments to the construction and infrastructure projects remain scarce.