24 2 3 - eurometaleurometal.net/wp-content/uploads/worldsteelnews20170424.pdf · issue 78 (1838),...

Issue 78 (1838), Monday,

Interview• Eurometal:“ConsumptionmoodinEuropeisratherpositive”....................... 24

Editorial• MENAwaitsforChinesebillettoreturn........................................................... 2

Latest contracts............................................................................................ 3

MENA• MoodsgenerallynegativeinTurkey’srebarsegment...................................... 4

• GCCbilletmarketstillamidconfusingpricemoves......................................... 4

• LebanonwelcomesChina’sreturnwithnodealsforlongs.............................. 5

• Azov-BlackSeascrapdownagaininTurkey................................................... 5

• Turkey’sErdemirpostsstrongfinancialresultsinQ1...................................... 6

• MSCbenefitsfromstrongerautomotivesectorinIran.................................... 7

• TosyaliAlgeria’snewsteelcomplextoreducecountry’simportdependence...... 8

Asia• ExportpricesforChinesebilletdrop,mayreboundsoon................................ 9

• China’sHRCproductionup14%inQ1,pricesstilldepressed........................ 9

• ChineseCRCfallsfutherdespiteproductioncuts......................................... 10

• CokingcoalfromAustraliadown$32/twithinweek.......................................11

• Ironoredownamidfaintsteelmarket.............................................................11

• SomeIndianmillslowerexportprices,butstillunattractiveforcustomers........ 12

• FarEasternscrapmarketcalm...................................................................... 13

• Inbrief:ShagangGroupdropslocallongpricesforlateApril....................... 14

CIS• CISflatsteelexportersforcedtocutprices................................................... 15

• LowerexportpricesforCISscrapdrivedemandup...................................... 15

• BuyersseekfurtherpricedecreaseforCISlongs......................................... 16

• TMK’sseamlesspipesaleshigheronstrongerUSoilandgassector......... 17

• ChinastartsconstructionofpipeplantinKazakhstan.................................. 17

Europe• LibertyexpandsinUS,tobuyrodmillfromArcelorMittal.............................. 18

• Spanishrebarpriceskeepdescending......................................................... 18

• Italiansectionspricesstable,merchantbarsdown....................................... 19

• Sweden’sSSABpostsstrongQ1results,optimisticforQ2........................... 19

Americas• Taiwan’sEUnitedGrouptoinvest$1.65billioninnewUSsteelmill............. 21

• VenezuelanHBIpricehigherincontracts,maysoftensoon......................... 21

• Inbrief:AKSteelincreasespremiumproductmixforautomotivesector...... 21

World• WSA:globalsteeldemandtogrowin2017-2018,butatslowpace.............. 22

Prices............................................................................................................... 23

World Steel News

April 24, 2017

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MENA waits for Chinese billet to return

TheMENAbilletspotmarkethasbeenfacingtransformationsincethesecondhalfof2016.Chinesesuppliersleaving

themarket,demandforrawmaterialsandbilletfromalternativesourcesincreased.Nevertheless,therecentprice

dropinChinamightbringChinesebilletbacktotheregion.Thecurrentsituationcreatedbackgroundforbuyersand

sellersofsemisandrawmaterialstomeetagainforthe3rdMENABilletandSteelmakingRawMaterialsConference,

whichwasheldonApril11-12inDubai.

Attheconference,participantsdiscussedtherecenttrendsandprospectsofthebilletandrawmaterialssegments.

Moreover,theeventgaveapossibilitytolearntheviewfromthetopontheburningissuesforthesteelindustryfrom

MohammedSalehAl-Jabr,ViceChairmanofSteelNationalCommitteeofCouncilofSaudiChambers.Oneoftheim-

portantdiscussedquestionswasavailabilityofsteelmakingrawmaterials.“Unfortunately,GCCwasdependingheavily

onSamarcobecauseitwasthemostconvenient.Nowthesituationhaschanged…Thisshortage[ofDRpellets]has

beencompensatedbyincreasedscrapconsumption,”MohammedSalehAl-Jabrpointedout.

AlthoughscrapconsumptionincreasedintheMENA,especiallyinH22016,someofthecountriesareexperiencing

lackofscrapavailability.AccordingtoSalamAlSharif,ChairmanofSharifMetalsInternational&PresidentofBureau

ofMiddleEastRecycling,scrapgenerationinKSAisabout2.2-2.3milliontpy,whichisnotenoughtocovertheexisting

demandforscrapinthecountry.Asaresult,“duetolimitedavailabilityofscrapitisdifficulttoincreasescrapusagein

EAFs,”aSaudiArabianproducertoldMetalExpert.TheUAEisfacinganotherproblem.Albeitthescrapgenerationis

5milliontpy,thecountryisactivelyexportingitandisforecasttodosointhefuture.“Eventhoughthereisanexport

levyontheexportsofferrousscrapinordertoprotectlocalindustrytheywillnotbeabletoprohibitexports.Iftheywish

totryIwillseeyouinnexttenyearsandtheywillstillnotbesuccessful,”SalamAlSharifsaidduringthediscussion.

Regionalpelletsrequirementalsoexceedsitsavailabilityintheregionandisexpectedtoincreaseinthefollowing

years,whichmightbecomebeneficialforIran.Iran’spelletsexportdutyexemption,incasethedecisionispositive,will

influencetheMENAregionmarket.Pricesforbothpelletsandpartlyconcentratewillbeeffectedbythatveryquickly.

CompetitionbetweenValeandLKABwillnotcreateabigproblemforIran’spelletsexport,accordingtoKeyvanJafari

Tehrani,MemberoftheBoard&HeadofInternationalAffairsatIROPEX.

Apartfrombeingabaitforrawmaterialssuppliers,theMENAwillremainakeymarketforbilletsellersaswell.Iranian

exporters,havinganadvantageofthelowestproductioncost,areplanningtousetheopportunityandincreasetheir

totalexportsalesofbilletsby38%year-on-yeartoaround2.5milliont,includingtheMENA.TheshareofCISsales

totheregion,however,mightdeclinebyalmost30%or1.4millionty-o-yduetotherecentdevelopmentsintheraw

materialssegmentofUkraine.

AlltheparticipantshavecometoaconclusionthatChinesebilletsuppliersareabouttocomebacktotheregion,which

isprovedbyrecentattractiveoffersofbilletsfromChinesemillsandespeciallytradersamidthepricedecreaseinthe

rawmaterialssegment.Nevertheless,China’sbilletexporttotheMENAisforecasttoreachonly1.3milliontin2017

(a 71%decliney-o-y),accordingtoMetalExpert.

Backtotop

Editorial



Methodology

MetalExpertpublishesthe

followingtypesofprices:

offer price –anofferfroma

supplierbutadealhasnot

beensignedatthislevelas

ofthetimeofpublication;

contract price –atransac-

tionpriceconfirmedonboth

seller’sandbuyer’sside;

price assessment –Metal

Expert’s estimate of a fair

price level for a possible

transactionincurrentmar-

ketconditions.

Daily price assessments for steel products and raw materials

Commodity CountryCurrency,

delivery termApril 21,

2017Daily

change

Ironore,62%Fe China $/t,CFRex-Australia 66.5 +1.5

Cokingcoal Australia $/t,FOB 270 –10

Ferrousscrap,HMS1&2(80:20) Turkey $/t,CFRex-USA 265 –2.5

Ferrousscrap,HMS2 Japan JPY/t,FOB 27,000 0

Squarebillet,150mm China $/t,FOB 395 +5

Squarebillet,150mm China RMB/t,EXWTangshan 2,780 +90

Squarebillet,125-150mm Ukraine $/t,FOB 378 0

Squarebillet,125-150mm Turkey $/t,CFR 393 +3

Rebar,12mm Turkey $/t,EXW 437.5 +2.5

Rebar,8-32mm Turkey $/t,FOB 423 0

Rebar,12,32mm Germany EUR/t,CPT 485 0

Rebar,16mm USA $/t,EXWTW 595 0

Wirerod,6.5mm China $/t,FOB 425 –5

HRC,3-12mm China $/t,FOB 420 –3

HRC,base Germany EUR/t,EXW 555 0

HRC,2-8mm USA $/t,EXW 716 0

Backtotop

The contracts for steel products and raw materials

Commodity/specifications Origin/supplier Consumer Volume, t Price & delivery terms DetailsFlat products

HRcoils,SAE,2mm China Vietnam n/a $410-415/tCFR Juneshipment

Scrap

HMS2 Japan SouthKorea 30,000 JPY27,000/tFOB Juneshipment

A3 Russia(Rostov-on-Don) Turkey 2,800 $250/tCFR -

A3 Ukraine Turkey 2,800 $250/tCFR -

Bonus Bulgaria Turkey 1,700 $258.5/tCFR -

HMS1&2(90:10) Ukraine Turkey n/a $251/tCFR -

HMS1&2(90:10) Romania Turkey n/a $251/tCFR -

DRI/HBI

HBI Venezuela Mediterraneanregion 30,000 $215/tFOB Mayshipment

HBI Venezuela Mediterraneanregion 30,000 $215/tFOB Mayshipment

Iron ore

Pilbarafines+Pilbaralumps62%Fe Australia China 100,000+70,000 unfixed Maydelivery

Major steel and raw materials futures in China, RMB/t ex-warehouse

Product Name of futures exchange Month of delivery April 21, 2017 Daily changeRebar,16-25mm ShanghaiFuturesExchange October 2,928 +39

HRC,3.5-9.75mm ShanghaiFuturesExchange October 2,961 +31

Ironore,62%Fe DalianCommodityExchange September 505.5 +17

Latest contracts



Moods generally negative in Turkey’s rebar segment

Turkey/Longproducts

ChangingmarketconditionsurgedTurkey’srebarexporterstorevisetheiroffersdownwards.Themainreasonforsofter

pricingisgenerallynegativemarketsentimentsamiddownturninChina,weakerscrapsegmentinTurkeyaswellas

lackofsupportfromrebarbuyers,bothathomeandabroad.

TheofficiallevelofexportoffersforTurkey’srebariscurrentlystandingwithin$420-425/tFOBwhilelastweekmills

weretryingtostickto$10/thigherprices.LocalrebaroffersinTurkeyarekeptathigherlevels–$430-445/tEXW,

mainlybecausesizeablediscountswillnotcreateadditionaldemandnow.“Millsaremorelookingatexporttodaywhile

prospectsforlocalmarketremainunclear,”atradingsourcetoldMetalExpert.

OfferstotheUSAarecomingat$485-490/tCFRTW,$5/tbelowthemid-monthlevels.Millsarecurrentlyintalksover

Mayshipments,thelatestdealswereclosedwithin$490-495/tCFRTW(includingADandCVD).

IsraelandEgyptreceiveoffersat$445-450/tCFRand$430/tCFRrespectively.Therehavebeennodealsasbuyers

insiston$10/tdiscounts.SalestotheGCCregionremainquitechallenging.“UAEbids$420-425/tCFRTWversus

$435/tCFRTWoffered,itistoolowforus,”aproducertoldMetalExpert.“InQ1Turkeyshippedonlyaround60,000 t

totheUAE,unbelievable,”headded.Notably,Yemenisinthemarketwithorders,withsomenegotiationsbeingcur-

rentlyunderway.

ExportoffersofTurkey’swirerodweakenedby$5-10/tw-o-wto$445-460/tFOBfrommostmills.Thedemandremains

satisfactorywithordersstillcomingfromtheEU,AfricaandtheMENAregion.

Backtotop

GCC billet market still amid confusing price moves

MiddleEast/SteelSemis

TheGCCbilletmarkethasbeeninaconfusedstatethisweekduetotheunclearpricesituationinChinarelatedto

volatilityandtraderstryingtosellshort.Whatisclearforeveryoneisthatitisbettertowaituntilthesituationstabilizes.

Asaresult,buyershavemostlyadoptedawait-and-seeapproach.

Asusual,pricesforsemisfromIranarethemostattractive.Thisweek’srangeis$385-395/tCFR($5-15/tdownweek-

on-week),butnotakershavebeenfound.Thelatestdealforapproximately30,000tofIranianbilletswasconcluded

lastweekat$395-400/tCFRwithaUAEcustomer.

MENA


http://metalexpert.com/en/products/Turkey-Middle-East-Steel%26RelevantIssue%3DAD7E6FD8DC56B7F3C2257FD2004E0C19


MENA

Chinesetradersaretryingtocompete,offeringbilletsat$385-405/tCFR.Mills’pricesaremuchhigher,rangingwithin

$410-415/tCFR($10/tdownw-o-w).Asaresult,amajorityofcustomersbelieveitisquiteriskytobuyfromChinese

tradersatsuchpricesespeciallytakingintoconsiderationthepreviousexperience.

PricesfromtheCIS($405-410/tCFR)andTurkey($410/tCFR)arenotattractiveatallasthematerialfromregional

producersisavailableat$410/tdelivered.ThelatestcontractforUAE-madebilletswassignedatthatleveloneweek

ago.“Ithinklocalproducersarestrugglingwithcurrentpricesbecausethelocalproductioncostismuchhigher,”a

GCCbuyertoldMetalExpert.Ifthecurrentmarketscenariocontinues,localsemismanufacturingmightbeunder

threatagain,leadingtoanotherimportsinfluxtotheregion.

Backtotop

Lebanon welcomes China’s return with no deals for longs

MiddleEast/Longproducts

Afterbeingabsentforalmostsixmonths,ChinesesuppliershavecomebacktotheLebanesemarketwiththelowest

offers.Competitivepricesarecomingonlyfromtraders,whilemillsareofferingathigherlevels.Nevertheless,local

customershavenotconcludedanydealsforthematerialfromChinaastheend-userdemandisnotsupportivenow.

China-originrebarandwirerodarecurrentlyofferedbytradersat$420-425/tCFRand$430-450/tCFRrespectively.

Millsarequotingsimilarproductsby$20-30/thigher,marketplayersreport.AlthoughpricesforChinesematerialfrom

tradersarethemostattractivenow, insufficientend-userdemandcoupledwithhigh levelof inventoriesandweak

stockists’prices($15-30/tdownoverthreeweeks)preventtradersfromconcludingnewdeals.“Lebanesemarketis

verydepressed.Thelevelof$405/tCFRisbreakeventoday,”alocaltradertoldMetalExpert.

PricesfromTurkeyandUkrainehavedeclinedby$10-15/toverthreeweeks.Nevertheless,beingpricedhigherthan

Chineseones,TurkishandUkrainianproductshavenotfoundanybuyersinthisdestinationoverthepasttwoweeks.

Lebanon: prices for long products, $/t

Market segment/product Origin/supplier Offer Three-week changeImport, CFR (June shipment)

Rebar China,fromtraders 420-425 n/a

Rebar Ukraine(ArcelorMittalKryvyiRih),frommill 430-435* –15

Rebar Turkey,frommills 430-440 –10-15

Mesh-qualitywirerod China,fromtraders 430-450 n/a

Domestic market, traders, delivered

Rebar import 450-460 –20-30

Mesh-qualitywirerod import 470-480 –15

*–indicativepriceNote:pricesarewithout10%VAT.Steelproductsfromnon-Arabandnon-Europeancountriesaresubjectto5%importdutyinLebanon.

Backtotop

Azov-Black Sea scrap down again in Turkey

Turkey/Scrap

TurkishcompaniescontinueferrousscrappurchasesfromtheAzov-BlackSeabasin.Theystillhaveenougharguments

intalkstoachievelowerprices.



MENA

Facingthinordersforfinishedproducts,Turkishmillsarenotveryactiveinrawmaterialsbookings.Atthesametime

theyreceivequitealotofoffersfromscrapexportersfromtheAzov-BlackSeabasin,sotheyinsistondiscounts.On

April20,aKaradeniz-basedintegratedsteelmakerclosedadealwithasupplierfromRussia(Rostov-on-Don),whosold

2,800tofA3materialat$250/tCFR,MetalExpertlearnt.Previousquotesforthisgradevariedbetween$257-260/t

CFRTurkey.“Somanyshort-seacargoesareavailable,thisistheresult!”amarketparticipantsaid.

Thesameconsumerreachedanagreementwithtwomoresellers.Inparticular,2,800tofA3scrapwasboughtfrom

Ukraineat$250/tCFRKaradeniz.And1,700tofbonusmaterialfromBulgariachangedhandsat$258.5/tCFR,Metal

Expertlearnt.

AMarmara-basedimportersourcedHMS1&2(90:10)fromUkraineandRomaniaatthesameprice–$251/tCFR.

AccordingtoMetalExpertdata,theybought10,000-11,000tofscrapintotal.

Deep-seamarketofthematerialstaysin lull.“OnlyatthebeginningoftheweeksomeEuropeanscrapcollectors

werelookingforbuyers,butthentheydisappeared,”atradernoted.Nevertheless,consideringdeclineinquotesfor

short-seascrap,priceassessmentforHMS1&2(80:20)fromtheUSAortheBalticregionslidto$265/tCFRTurkey

versus$265-270/tCFRearlier.

Backtotop

Turkey’s Erdemir posts strong financial results in Q1

Turkey/FlatProducts,SteelSemis,Longproducts

Turkey’slargeststeelmakerErdemirGroupsignificantlyimproveditsfinancialperformanceinQ12017owingtofavour-

ablepricesituationprimarilyasaresultofsoliddemandintheflatssegment.

OverJanuary-March2017,Erdemir’snetprofitsurgedby336%to$244millionyear-on-year,whilesalesrevenueadded

almost30%to$1.14billiony-o-y,accordingtocorporatefinancialstatement.Inaddition,thecompany’sEBITDArose

by189%to$359milliony-o-y.

Substantialimprovementoftheproducer’sfinancialresultswasdrivenbyhighfinishedsteelprices,particularlyinthe

flatssegmentowingtoriseindemandformaterials,especiallyonforeigndestinations.Locallythemostsignificant

supporttoErdemir’sflatssalescamefromfavourabledevelopmentsinTurkishautomotiveandwhitegoodssectors.

OverallinQ1thecompany’ssalesofflatproductsamountedto1.75milliont(down7.7%y-o-y),whilelongsshipments

decreasedmuchmoresignificantly–by24.6%to300,000ty-o-y.Thedownturninlongsshipmentscanbeattributed

totheproduceroptingtofocusonsalesofflatproducts,MetalExpertestimates.


http://www.me-freight.com/


MENA

Overall,theuptrendinautomotiveandwhitegoodssegmentsisexpectedtocontinuethusfurthersupportingErdemir’s

performance.Atthesametime,theproducerisplanningtoincreaseitscapitalexpenditureby267%to$595million

y-o-yaimingtoexpanditspresenceindomesticandforeignmarkets,asMetalExpertreportedearlier.

Erdemir Group’s financial and operating highlights in 2016

Indicator Unit Q1 2016 Q1 2017 Change, %Salesrevenue $million 874.5 1,135.0 +29.8

EBITDA $million 124.1 359.0 +189.3

Operatingincome(EBIT) $million 74.1 320.7 +332.8

Netprofit $million 56.0 244.0 +335.7

Productionofsteel milliont 2.362 2.350 –0.5

Productionofflats milliont 1.820 1.857 +2.0

Productionoflongs milliont 0.396 0.298 –24.7

Shipments milliont 2.289 2.045 –10.7

incl.flats milliont 1.891 1.745 –7.7

incl.longs milliont 0.398 0.300 –24.6

EBIT/t* $/t 32.4 156.8 +384.0

*–MetalExpert’sestimate.

Backtotop

MSC benefits from stronger automotive sector in Iran

MiddleEast/FlatProducts

Iran’sautomotivecompaniessignificantlyincreasedproductionoverayearlendingsupporttoflatsteelconsumption

inthecountry.ThelargestIraniansteelproducer–MobarakehSteelCompany(MSC)–managedtostrengthenits

positioninthesegmentamidhighertradebarriersagainstimports.

OverthepreviousPersianyear(March21,2016–March20,2017)Iranproduced1.3millionunits,40.7%upyear-on-

year,accordingtotheMinistryofIndustries,MiningandTrade.Suchagrowthwassupportedmainlybylaunchingnew

modelsaswellasimprovementsinsalespolicy,especiallyprovidingcreditsforthecustomers.Thelion’ssharebelongs

totheleadingcarmakerinthecountry–IranKhodroIndustrialGroup(IKCO)–whichmanufactured634,481 units

(+31%),accordingtotheMinistrydata.Atthesametime,thesecondlargestcompanySAIPAproduced319,850units

(+43%),whileParsKhodro–197,989units(+74%).

MSCwasthemainbeneficiaryofthestrongerautomotivesector.Ifpreviouslythecompanywasfocusingmainlyon

steelsuppliesforexternalautoparts,lastyearitseriouslystrengtheneditspresenceinthesegment.“CurrentlyMSC

isabletoprovidebothinnerandexternalpartsforvehicles,especiallyfornewmodels,”acompanysourcetoldMetal

Expert.“Wehavethelong-termagreementwithIKCOtorevampproductionatourCRClinetoproducehigh-quality

materialforthesegment,”headded.MSC’sassetChaharmahalandBakhtiariAutomotiveSheetsCompanyprovides

coatedsteelandCRcoilsforIraniancarmakers.

ItisworthmentioningthathigherimportdutyalsoplayedintohandstoMSC,aspositionsoftraditionalsupplierfor

theautomotivesector–SouthKorea–weakenedsignificantlyovertheyearof2016.Inparticular,duringtheperiod

underreview,IranreducedpurchasesofKoreanflatsby63%toalmost280,000ty-o-y,accordingtoMetalExpertdata.



MENA

Moreover,MSChasallchancestostrengthenitsleadershipintheautomotiveindustryfurther,takingintoaccount

boldtargetsforthesector.Itisexpectedthatcarproductionwillreach1.5millionunitsbytheendofthecurrentIranian

year(endsonMarch20,2018),accordingtoMinistryofIndustry,MineandTrade.

Backtotop

Tosyali Algeria’s new steel complex to reduce country’s import dependence

NorthAfrica/Longproducts

Algeriaisconfidentlyapproachingsteelmarket’sself-sufficiencyprovidedbytherecentinaugurationofTosyaliAlgeria’s

newcomplex.

OnApril19,thecountry’sPrimeMinisterAbdelmalekSellalinauguratedanewrebarmillatTosyaliAlgeria’splantin

theeconomicandindustrialzoneBethioua.Theprojectwilladd2milliontpyofrebartotheexistingrollingcapacity.

Consequently,theproducer’sgrowingproductionprovidessignificantsupporttotheAlgeria’sgovernmentpolicy,which

aimstoreducecountry’sdependenceonimports.“WeaspiretomakeofAlgeriaoneofthelargeststeelproducersin

theMediterranean.Ourgoalistobecomeanemergingcountryby2020,”thePrimeMinisterAbdelmalekSellalsaid

duringthepressconference.

Inaddition,Algeria recentlywelcomedcommissioningofAlgerianQatariSteel’sBellaracomplex,market insiders

informedMetalExpert.Themillwillincreasecountry’sproductionpotentialinthelongsteelsegmentbysomemore

2milliontpy(1.5milliontpyofrebarand500,000tpyofwirerod).

Atthesametime,theAlgeriangovernmentisslowingdownthelicensingprocessforrebarandwirerodimportsinorder

tosupportboldexpansionplansannouncedbylocalproducers.“Thesituationwithlicensingisunpredictable.There

mightnotbeimportationatallsincethegovernmentaimstoavoidimportationandincreasethedomesticproduction,”

amarketsourcetoldMetalExpert.

ItisworthmentioningthatAlgeria’srebarimportsreducedin2016duetothegovernmentprogrammeforreducingthe

country’simportdependence.Importquotasandinsufficientdemandwerethemainreasonsforlowerimports.Over

January-December2016,thefiguredecreasedby10.4%to2.71milliontyear-on-year,accordingtoCustomsNational

CenterforComputingandStatistics.

Backtotop



Export prices for Chinese billet drop, may rebound soon

China/SteelSemis

Chinesebilletexportpriceshavedroppedagainovertheweekduetodisproportionalitybetweensupplyanddemand

inthelocalmarket.However,Friday’s$9/tpick-upinTangshanhasconfusedthemarket,makingsentimentsamong

theinsidersverydifferent.

OnFriday,April21,billetoffersarequotedat$390-400/tFOB,whichis$10/tbelowlastweek’slevel.Semisareoffered

atthisrangebyChinesetraders,whoaregoingtooperatebacktobackwithmills.FromMondaytillThursdaysuppliers

havemostlybeensurethatpriceshavebeenfollowingthestrongdownwardtrend,sonumerousoffersfromtradersfor

sellingshorthavebeenatmuchlowerpricesofaround$360-390/tFOB.GCCimportershavereportedofferscoming

fromChinaat$385/tCFR($368-370/tFOB).Egyptianbuyershavegotoffersat$390-395/tCFR($362-367/tFOB).

However,thesituationhaschangedonFriday,whenlocalTangshanquoteshavejumpedbyRMB70/t($10/t).Some

Chinesemarketsuppliersarenowsurethatpriceswillcontinuetoreboundinthenearfuture,as“millsareatbreak-

evenorevenbelow.Rawmaterialsarereboundingevenmore,sotherearenoreasonsforsteelmillstofurtherlower

theprice,”amajorHongKongbasedtradertoldMetalExpert.SomeTangshanbasedmillshavereportedbetterlocal

demand,asre-rollingmillsaregoingtoincreaseproductionoflongs,seeingbettermarginscomparedtothesegment

forflats.“Wehavetoomanyordersnow,demandisverygood,”aTangshanXindaSteel’srepresentativetoldMetal

Expert.Asaresult,manyoffersfromtraderssellinginshortpositionatpricesbelowthemills’quotesarelikelytodis-

appearfromthemarket.“Thosewhoofferat$360-380/tFOBnow,arelaggingbehind,”amajorChinesetradersaid.

Despitetheappearanceofmanypositiveexpectationsinthemarket,realfactorsshowthedownwardtrendwillcon-

tinue,asmillsandtradersstillhavelargestocks,withproductionalsoremaininghigh.DemandinsideChinaisalso

unlikelytobesogoodtoconsumeallthesupplyvolume.

Backtotop

China’s HRC production up 14% in Q1, prices still depressed

China/FlatProducts

GiventhatproductionofHRcoils,sheetsandstripswasgrowingatahighpaceinChinainQ1,loweroutputinMay

isunlikelytopushpricesup.

WhiletheQ1productionofrebar,wirerodandCRcoilswasslightlylowercomparedtolastyear,theoutputofHR

steelproductsoutputjumpedby14%to35.95milliont,accordingtothedataofNationalBureauofStatisticsofChina.

InMarchHRcoilsandsheetsproductionincreasedby12.5%to12.5milliont.Goodsentimentsandpositiveexpec-

Asia


http://www.seaisi.org/seaisi2017/


Asia

tationsofseasonaldemandencouragedmillstofocusonproductionoftheseproductsprecisely.Demandseemsto

beinsufficienttoconsumeallthesevolumesinApril,whilestocksareextremelyhigh.

OncomingmaintenancesatChinesemillsareunlikelytoturnthepricetrendupinthenearfuture.Themarketwillbe

stillunderpressureofoversupplyinMay.However,somemarketsinsidersthinkthatitwillbeagoodtimetogetridof

stocks.“Millshavetolowertheirinventoriesduringthemaintenances,thentheywillpushproductionupagainIthink,”

amajorChinesetradertoldMetalExpert.

Backtotop

Chinese CRC falls futher despite production cuts

China/FlatProducts

ChineseCRCexporterscontinuetocutofferssharplyamidnegativesituationinthedomesticmarketandweakde-

mandonexternaldestinations.

ThisweekmostChinesemillshavebeenofferingCRCforexportat$450-460/tFOB,aplungeof$20/tand$50/t

comparedtolastweekandtwo-weekagolevel,asdomesticpriceforthematerialhasreducedby$45/t(RMB319/t)

sinceearlyApril,andHRfeedstockhassunkby$48/t(RMB333/t)overthesameperiod.

Foreigncustomer’sapproachtobookingCRCfromChinaremainsverycautiousamidfallingsteelquotes.“Iheard

aboutseveraldealstoSouthAmericathesedays,butintotalbuyingisweak,”aChinesetradertoldMetalExpert.

Buyers’cautiousnessiseasytounderstandastherearealotoffactorsthatmaypushthepricedownfurther.The

demandforflatproducts,forCRCinparticular,keepssofteninginChina,leadingtoreductionoftheproductoutput.

AccordingtoChina’sNationalBureauofStatisticsdata,inMarchthevolumeofCRCproductioninthecountryde-

creasedby3.1%to3.207millionty-o-y.

However,ithasfailedtopreventthequotesfromthefallinAprilduetolowconsumption.Duringthelasttwoweeks,

anumberofChinesemajorproducerscutCRCoffersforMayby$51-102/t(RMB351-702/t)including17%VATcom-

paredtoAprillevel.

“Weexpectthatmillswilldecreasesteeloutputnextmonth.Itcouldgivethepricessupport,butonlyforsometime,

aswestillseenosignalforCRdemandpick-up,”anothersourcesaid.

Backtotop


http://metalexpert.com.test.can/PDFresources/0/4C4371D7DFC9EEB1C22580FE002FD359/%24FILE/Metal%2520Expert%2520in%2520Focus_Middle%2520East%2520Steel_April%25202017.pdf


Asia

Coking coal from Australia down $32/t within week

Australia/Coal

Therallyinthecokingcoalmarketcontinuedtolosesteam,withoffersfromAustraliadroppingbyanother$10/tsince

Wednesdayand$32/toveraweekasundersupplyworriesarenoweasing.

Offersofhardcokingcoaldroppedto$260-280/tFOBinthewakeofnewsthatGoonyellatrainline,thelargestin

termsofexporttonnage,willopen12daysaheadofschedule,onApril26.Itwillstillsufferfromreducedcapacityand

speedlimitations,butthenewsdidalottobrightensentiments.

“OnceGoonyellaisupandrunning,youshouldthinkthepricewilldrop,”UBS’sanalystsaid.

Andthereisnowafurtherevidenceoftheoutlook,asaccordingtoasourcefromChina,“$280/tFOBisnotworkable

now,thehighestacceptableis$260/tFOB.ThereisalittledemandforAustraliancargoatthemoment,asthelocal

priceismuchcheaper.”Chinesecompaniesareevensellingrawmaterialtoneighbouringcounties.Atthebeginning

oftheweek,75,000tofhardcokingcoalwassoldtoSouthKoreaat$270/tFOBChina.

ButnotonlySouthKoreaisbuyingcoalfromelsewhere,Japanesemillsthathadrunoutofcoaljustaheadofthe

cyclone,wereheardbuyingthematerialfromtheUnitedStates,Canada,China,andRussia.

AccordingtoMetalExpertsources,priceswillcontinuefallingnextweek,consideringthattheopeningofGoonyella

linefallsonWednesday.

Coking coal prices, $/t

Products Ash, % Volatiles, % Sulphur, % Origin Delivery terms Price W-o-wHard 8-10 19-24 0.5 Australia FOBHayPoint 260-280 –31.5

Semi-soft 9 30-36 0.5-0.6 Australia FOBGladstone 123-128 –2

Hard 9-10 20-25 0.7 China CFR(incl.17%VAT) 191-197 –16

Note:MorecoalpricesareavailableinWorldCoalNews

Backtotop

Iron ore down amid faint steel market

China/IronOre

Ironoremarkethasseensharpfluctuationsthisweekwithdecreaseprevailingamidadverseconditionsinfinished

products.


http://metalexpert.com/web/OpenMEMKNews.nsf/0/C7B89B473DE55151C22580E90051AD8C/%24FILE/Metal%252BExper%252Bin%252BFocus%252B-%252BChina%252Bin%252BSEA_March%252B2017.pdf


Asia

Australianironorefines62%Fehavepostedaweeklydropof$2.25/tto$66.5/tCFRamidaplungeinfuturesand

steelearlierthisweek,withTangshanbilletdroppingby$14/t(RMB100/t)comparedtolastFriday.Onadailybasis

thepricehasgained$1.5/tsupportedbyreboundinthesteel,futuresmarketandhigherbuyinginterest.

Butdespitebettersentimentintheironoresegmentseenrecently,thedemandforsteelremainsnotsatisfactoryand

isnotexpectedtoimprovesoon.ThebiggestChineseprivatesteelmakerShagangGrouphasslasheditsrebaroffer

forlateAprilby$36/t(RMB250/t)comparedtothepreviousten-dayperiodamidnegativeconsumptionforecasts.

AccordingtoMysteeldata,thenumberofprofitablemillshasfallenby12.89p.p.duringthisweekasmarginswere

quicklyshrinkingduetoasharpfallinsteelprices.

Friday’s$13/t(RMB90/t)increaseofTangshanbilletisseenonlyasa“compensation”afterasignificantdrop.“There

isnothingsurprisingintherise,aspricewasconstantlyfallingduringthelasttwoweeks,”atradersourcetoldMetal

Expert.

Inthissituation,thesteelmakershavemostlybeenshunning

dealsforseaborneironore.Butastheirrawmaterialinven-

toriesaredecreasing,someofthemwillbeforcedtorestock,

andtradingactivityisexpectedtoimprovenextweek.The

forecastsarealsobrightenedbyoutputreductionexpected

inMaythatcansupportsteelprices.

Currently,however,averageblastfurnacecapacityutilization

ratehasslightlyincreasedthisweek,exceeding86%,despite

oversupplyinthesteelmarketandlowermills’profits.

China: deal prices for iron ore, $/t

Products Fe, % Sale method Volume, t Delivery Price, CFR QingdaoPilbarafines+Pilbaralumps,Australia 62 COREX 100,000+70,000 May unfixed

Backtotop

Some Indian mills lower export prices, but still unattractive for customers

India/FlatProducts

SomemajorIndianmillsdecreasedexportpricesduetothedowntrendintheglobalmarket.However,theyfailedto

attractcustomers.Otherproducerskeptquotesunchangedandfocusedonlocalsales.

China: import prices for Australian fines, 62% Fe, $/t CFR

65

70

75

80

85

90

95

03.02 17.02 03.03 17.03 31.03 14.04 28.04

*-forecast

*


http://specialprojects-bs.com/en/bsprojects/320


Asia

Somesuppliers loweredprices,but it isstillmeaningless,takingintoconsiderationmuchlowerquotesfromother

countries.“MillsaregivingindicationsforHRcoilsat$500/tFOB…EvenifIcouldget$480/tFOBstillnobodyisgoing

tobuy,asmanyalternativesuppliersofferatmuchlowerlevel,”anIndiantradertoldMetalExpert.TataSteelandSAIL

indicationsarearound$450-470/tFOB,however,thesetagsarestillnotattractiveforthecustomersinEurope,who

givebidpricesatleastby$30-40/tlowerthanIndianmills.

HRCexportpricesfromEssarSteelandJSWSteelstayedat495-512 $/тFOB,thesameonaveragecomparedto

lastweek.OffersaremostlyheardinEurope,whilethereisalmostnoactivityintheMiddleEastorintheFarEast

asbuyersthereadoptawait-and-seeattitude.“ChineseHRCtagshavegonedownconsiderably,butIndianmillsare

tryingtohold[export]pricesatahighlevelasthedomesticmarketisstillgood,”asourcesaid.

DomesticquotesarestayingataroundINR36,000-37,500/t(around$560-580/t)EXW.However,followedbyadropin

theglobalmarket,theyareexpectedtodecreasebytheendofAprilbyINR1,000/t(around$15/t),marketsourcessay.

Amongotherreasonswhichmakeexports lessattractive formillsare transportationcosts.“Whenyougivesome

quotesforEuropeancustomers,youhavetocalculatethefreight,whichhasrecentlygoneupby$10-13/tto$42-45/t,”

anexportersaid.

Backtotop

Far Eastern scrap market calm

FarEast/Scrap

ThemajorityoftheFarEasternbuyersholdbackfromnewscrapbookingsthisweek.Thus,millsaretryingtoachieve

discounts,referringtoweakerquotesforChinesesteel.Atthesametime,exportersaremainlytryingtofollowtheir

pricepolicyandkeeppricesfirm.

SouthKoreanmillsshowalimitedinterestinJapanesescrappurchases.ThesoledealforHMS2materialhasbeen

concludedthisweekatJPY27,000/t($247.2/t)FOB,JPY1,000/t($9.2/t)downcomparedtolastweek’scontractlevel.

Itisworthmentioning,thatJapanesedomesticmarketsomewhatplaysintoimporter’shands.Thus,todayJapanese

EAFsteelmakerTokyoSteelhasannounced the fourth roundofpricedecreasesince thestartof themonth: the

newpurchaseprice forHMS2scrap is rangingbetween

JPY 28,000-29,000/t($256.3-265.5/t)andiseffectivestarting

fromApril22,MetalExpertlearnt.Intotal,overApril,compa-

ny’spurchasepricehaslostJPY1,000-2,500/t($9.2-22.9/t).

NominalquotesforUSHMS1andRussianA3gradescrap

aregettingabitweaker,correspondingtopricessoftening

onalternativedestinations,specifically,toTurkey.

TheUScontainerisedHMS1&2 (80:20) scraphasbeen

offeredat$243-247/tCFRTaiwan,$9-10/tdownfromlast

week’soffers,butnodealshavebeenreportedanyway,as

millspriceideadoesnotexceed$239/tCFRlevel.

South Korea: scrap prices, $/t CFR

230

245

260

275

290

305

320

335

03.02 17.02 03.03 17.03 31.03 14.04 28.04

USA, HMS 1Russia, A3Japan, HMS 2

**–forecast



Asia

Far East: scrap price, $/t

Origin Grade Delivery terms Transportation Price W-o-wUSA HMS1&2(80:20) CFRTaiwan containerised 243-247 –10/-9

USA HMS1 CFRSouthKorea bulk 275-280 –5/0

Japan HMS2 FOB bulk 247* –10**

Japan HMS2 CFRSouthKorea bulk 268* –10**

Russia A3 CFRSouthKorea bulk 270-273 –3/0

*–dealprice**–withcurrencyfluctuation.Theexchangerateis$1=JPY109.23.

Backtotop

In brief: Shagang Group drops local long prices for late April

China/Longproducts

ThelargestprivatesteelmakerinChinaShagangGrouphassignificantlydecreaseddomesticpricesforlongproducts

withdeliveryduringApril21-30amidweakeninglocaldemandandhighstocks.Shagang’srebarhaslostRMB250/t

($36/t)comparedtotheprevious10-dayperiod,wirerodandcoiledrebarpriceshavedecreasedbyRMB180/t($28/t).

Backtotop


http://www.husltd.com/en/


CIS flat steel exporters forced to cut prices

CIS/FlatProducts

CISflatsteelexportersareforcedtolowerquotesinlinewithdowntrenddrivenbyChina.Dwindlingbuyingactivityis

likelytodetermineadditionalreductions,marketinsiderssay.

Inmid-April,HRC frombothRussia andUkrainewere bookedat $460-465/t FOBBlackSea,mainly toTurkey

($375-385/tCFR).However,bynowofferpricesfromtheCISslippedto$450-460/tFOBBlackSeaandthepressure

fromthecustomerspersists.Particularly,inNorthAfricaandMiddleEastbuyers’priceideahasalreadymoveddownto

$450-460/tCFR(about$430-440/tFOB)orbelowthat.“Ithink$450/tCFR[NorthAfrica]wouldbeafairpricefortoday

inlightofChinaslump,butsuppliers[fromtheCIS]willresistunlessnewcollapsehappensintheglobalmarket,”an

internationaltradersaid.Apartfromaggressivepricepolicyof

China,unfavorablefundamentalsdomesticallyinMENAare

addingtonegativesentiments.Forinstance,furthersoftening

ofquotesforthelocalmaterialisexpectedinTurkeyshortly.

Egyptiancustomersarestillfacingcurrencyissue;besides

somebookingweremadeinearlyApril.

IndicationsforCRcoilsareat$510-530/tFOBBlackSea.

ThelatestdealsfromUkraineandRussiawereclosedatthe

upperendoftherangeattheendoflast-beginningofthis

week,sourcessaid.Workablelevelisexpectedtorolldown

byanother$20/tinnewcontracts.

Backtotop

Lower export prices for CIS scrap drive demand up

CIS/Scrap

TheCISexportmarketforscraphasweakenedthisweek.ThenumberofsalestoTurkeyhasincreasedsignificantly,

whiletheFarEasternmarkethasbecomequiet.

Seeingfallingpricesforfinishedandsemi-finishedsteel,Turkishcompanieshavekeptpressingfordiscounts.Suppliers

fromRostov-on-Donhaveagreedtocutpricesmostsubstantiallyandmanagedtosignsomecontracts.According

toMetalExpert’sdata,somesellersmanagedtomarketlotsofA3scrapat$257-260/tCFR,whileattheendofthe

weekbuyersagreedtopayonly$250/tCFR.“ScrapfromRostov-on-Donisavailableatthemostattractiveprices,”a

Turkishsteelmakersaid.Notably,bidsdidnotexceed$260/t

CFRbeforethereferenduminTurkeyalready.

Ukrainianexportershavealsobecomemoreflexible.Asa

result,A3scraphaschangedhandsat$250/tCFRTurkey,

HMS1&2 (90:10)–$251/tCFR.Thepreviousquotes for

UkrainianA3gradewerejustnominalat$255-260/tCFR.

LastweektalksbetweenscrapcollectorsfromSt.Petersburg

andTurkishmillsresultedinasaleofamixedlot,inwhich

HMS1&2(80:20)waspricedat$265/tCFR.Thisroutesaw

thedowntrendaswell.AccordingtoMetalExpert’sdata,this

HRC prices, $/t FOB Black Sea

450

460

470

480

490

500

27.01 10.02 24.02 10.03 24.03 07.04 21.04

ex-Russia

CIS: prices for A3 scrap, $/t FOB

190

200

210

220

230

240

250

260

270

280

27.01 10.02 24.02 10.03 24.03 07.04 21.04

Azov Sea

BalticSea

JapanSea

CIS



CIS

suppliersoldHMS1&2(80:20)at$269/tCFRfewdaysearlier,whileinearlyAprilanotherexporterestimatedshipment

ofasimilargradeat$274/tCFR.

NodealshavebeenreportedintheFarEast.AmidsluggishfinishedsteelsegmentintheregionandcheaperJap-

anesescrap,pricesforRussianA3havemovedto$270-273/tCFRSouthKorea,whereasthemostrecentcontract

tookplaceat$273/tCFR.

CIS: export and collection prices for A3 scrap, $/t($1=RUB56.42;$1=UAH26.76)

Origin Price, FOB W-o-w Price, CPT W-o-wAzovSea,Rostov-on-Donport 225-238 –9 199-206 –4

BlackSea,Novorossiyskport 229-242 –10 - -

BalticSea,St.Petersburgport 236-237 –8 204-213 +8

SeaofJapan,Vladivostok,Nakhodkaports 248-256 –2 204-213 –8

BlackSea,Odessa,Nikolayev,Khersonports 224-230 –8 168-183 –7

Backtotop

Buyers seek further price decrease for CIS longs

CIS/Longproducts

InthesecondpartofApril,thetensionintheexportmarketofCISlongsintensifiedamidpricefallfromChina.Buyers

arecautioustoclosedeals,anticipatingfurtherdrops.

SinceChinadroppedpricesbyabout$20/toveraweek,mostcustomerswithdrewfromthemarket,expectingthesame

actionsfromtheCIS.“Everybodyisevaluatingthemarketnow.QuoteshavedeclinedfromtheBlackSeabasin,butit

isnotenoughcomparedtowhatissetbyChina,”asourcesaid.TagsforCISwirerodsankto$435-440/tFOBBlack

Seadownfrom$450/tFOBBlackSealastweek.SomevolumesarestillbeingcontractedonEuropeandestination,

whereasintheMENAregionbuyersprefertostayinawait-and-seemode.“Italy,SpainandBelgiumwerelooking

forsomebookings.Iwouldsay$430-435/tFOB[forCISwirerod]couldwellbeworkablethere,”atradertoldMetal

Expert.Meanwhile,customers’priceideaintheMiddleEast

isnotabove$420/tFOBBlackSea.Yet,tightsupplyfromthe

CISwillkeepbuoyingpositionsofexporters.Forexample,

MaybookofordersofNovorosmetall(oneofthefewactual

supplierscurrently)ishalf-filledalready,accordingtosome

marketinsiders.

CIS rebar quotes pegged at $415/t FOBBlackSea vs.

$420-430/tFOBBlackSeainmid-April.Bidsareheardin

theMiddleEast at about $400/t FOB, but “real business

willbedonewhenthesituationwithChinasettlesdown,”a

sourcesaid.

Backtotop

CIS: long products export prices, $/t FOB Black Sea

390

405

420

435

450

465

480

27.01 10.02 24.02 10.03 24.03 07.04 21.04

Wirerod

Rebar



CIS

TMK’s seamless pipe sales higher on stronger US oil and gas sector

CIS/Tubes&Pipes

WithanupturninUSoilandgassector,Russia’sTMKmanagedtoraiseseamlesspipeshipmentsinQ1,whilesales

ofweldedpipesweakened.

Seamlesspipesshipmentsrose4%,withthebiggestincreaserecordedinOCTG–up12%to426,000t.TheAmerican

divisionraisedsalesby5%andtheRussianone–2%;OCTGsalesimprovedby13%and9%,respectively.“Sales

growthofourcoreproduct,seamlessOCTG,reflectsthegradualrecoveryoftheUSoilandgasmarketandsteady

demandforourproductsfromupstreamplayersinRussia[…].Weexpectthatthelevelsofactivityintheoilandgas

sectorwill remainhigh in our keymarkets, driving in-

creaseddemandforourpipes,”AlexandrShiryaev,CEO

ofTMK,commented.

Atthesametime,salesofweldedpipesdecreasedby

23%duetoaplungeindemandforlarge-diameterpipes

inRussia,accordingtoMetalExpert’sdata.

TMKexpectssteadilyhighperformanceinRussia,but

theUSmarketremainsthemostpromisingdestination.

“ThecompanyanticipatesitsNorthAmericanbusiness’

financial performance to grow considerably inQ2-Q4

2017,giventhesteelpricewillnotrisesignificantly,”the

officialreportreads.

Backtotop

China starts construction of pipe plant in Kazakhstan

CIS/Tubes&Pipes

ChinaNationalPetroleumCompany(CNPC)startedconstructionofthefirsthigh-techplantonproductionoflarge-diam-

etersteelpipesinAlmaty,Kazakhstan,tomeetthegrowingdemandfromthemainconsumingindustriesofthecountry.

Thenewplantcapableofproducing100,000tpywillmanufacturesteelpipeswithdiameterfrom355mmto1,420 mm

tobeusednotonlyinoilandgasbutalsoinmining,construction,chemicalandpowerindustries.Commissioning

oftheplantisscheduledforthemiddleof2018.Investmentsforthisprojectareestimatedataround$100million,

accordingtothelocalsources.“Theconstructionofthenewhigh-techplantwillensureimportsubstitutionof60%of

importedpipeproductstoKazakhstan,createnewjobs,andprovideadditionaltaxrevenuestothebudget,”Almaty

MayorBauyrzhanBaibeksaid.

TheimplementationoftheprojectbecamepossibleundertheProgramofComplexStrategicCooperationinOiland

GasIndustrybetweenKazMunayGasandCNPCthatwassignedin2014,MetalExpertlearnt.

Backtotop

TMK: pipe shipments, ’000 t

Indicator Q1 ’17 Q4 ’16 Q-o-qPipes, total 850 882 –4%

Russiandivision 650 721 –10%

Americandivision 154 116 32%

Europeandivision 46 45 2%

Seamless pipes 658 633 4%

Russiandivision 493 485 2%


Europeandivision 46 45 2%

Welded pipes 192 249 –23%

Russiandivision 157 236 –33%




Liberty expands in US, to buy rod mill from ArcelorMittal

WesternEurope/Longproducts

GlobalindustrialandmetalsgroupLibertyHouse(Liberty),famousforturningaroundtroubledassets,keepsexpanding

itsbusiness,thistimeoutsideEurope.

LibertyhasmadethefirststepinitsinvestmentplantoexpandintheUSA.Thegrouphasreachedanagreementin

principlewiththeworld’slargeststeelmakerArcelorMittaltopurchaseGeorgetownSteelworks,mothballedinAugust

2015.“We’rekeentoapplythesamelow-carbonGREENSTEELvisionhereaswearedoingintheUK.Acquiringthe

plantatGeorgetown,withitsabilitytorecyclescrapsteelinanarcfurnace,givesusastrongplatformfromwhichto

launchourstrategyintheUSA,”Liberty’sexecutivechairmanSanjeevGuptasaid.

TheSouthCalifornia-basedassetisequippedwitha600,000stpyEAFanda750,000stpywirerodmill,thecompany

saidinthepressreleasesenttoMetalExpert.Thedealissubjecttofinalagreementbetweenthepartiesandadue

diligence,whichLibertyplanstocompleteoverthecomingweeks.

Backtotop

Spanish rebar prices keep descending

SouthEurope/Longproducts

BothdomesticandexportpricesforSpanishrebarhavebeenretreatingsinceearlyAprilduetoweaktradingbefore

andaftertheEasterholidays.Participantsbelievequotesmaycontinuetodecrease.

SpanishandEuropeanmarketsarestillsufferingfromlowbusinessactivitycoupledwiththedowntrendinthescrap

sectordrivenbyweakersentimentsintheinternationalmarket,resultinginaEUR10-15/tfallinrebarofferpricesover

twoweeks.Athome,justfewdealshavebeenheardatEUR150-155/tDDPbase(EUR425-430/tDDPfor12-14 mm,

gradeBST500S),without22%VAT.“Themarketisvery

quietwithmany customers still on holidays,” aSpanish

longsproducertoldMetalExpert.

Accordingtosources,alotofcustomersinSpainandEu-

ropeneedtore-stockonrebar.Nevertheless,theypreferto

suspendpurchasesatleastuntilearlyMayamiddescend-

ingmarket.“WethinkSpanishrebarpricesmightdecrease

uptoEUR5-15/tmoretilltheendofApril,”arepresentative

ofSpanish-basedtradingcompanysharedopinion.

Spain: rebar offer prices with delivery in May, EUR/t(domestic–without22%VAT)

Market segment/product Price Two-week changeDomestic market, DDP

Base 155-165 –15

12-14mm,BST500S 430-440 –15

Export to EU

8-32mm,BST500S,FOB 420-430 –10-15

8-32mm,BST500S,CFR 440-450 –10-15

Europe


http://metalexpert.com/en/products/Steel-Explorer%26RelevantIssue%3DE4091FE8E07F9708C2257FD2004CD733


Europe

BusinessactivityofAlgeriancompanieshasbeencurbedby troubleswithobtainingof licencessinceJune2016.

InsidersexpectedAlgerianbuyerstoreturninmid-April,butithasnothappenedyet.

TheUSisoneofthemostprospectiveexportoutletsforSpanishrebarproducersatthemomentwithnegotiations

onMayshipmentsgoingon.TherecentdealswithUSbuyerswereheardinthefirsthalfofAprilat$485/tCFRTW,

Aprilshipment.

Backtotop

Italian sections prices stable, merchant bars down

SouthEurope/Longproducts

Italiansections’supplierskeptpricesstableinamonthlycomparison,whilemerchantbarslostEUR30/tamidlow

demandanddownwardtrendinscrapquotations.Marketparticipantsexpectfurtherdecreaseinthelongrun,but

inthenearfuturesituationwillremainstableduetoverylimitedbusinessactivityinthecountry,causedbyholidays.

InAprilItaliandomesticsuppliersofmerchantbarshavetodecreasepricesamidoveralllowdemandaheadofholidays

onApril25andMay1.Moreover,downwardtrendinthescrapsegmentmakesproducerstostepbackfromannounced

increasesinMarchtotheacceptablepricelevel,whichissetatEUR50-60/tEXWbase.Sectionshoweverarestill

stableatEUR120-130/tEXWbase,becausepricinginthissegmentwasmoresustainableduringthelastwaveof

increasesinMarch.

Mostmarketparticipantsexpectsituationtoremainstableinthenearfuture.“Lowdemandandslowlydecreasingscrap

havealreadyplayedtheirrolesandpulledpricesdown.Nowthepricesareprettystable,sothereisnorealspacefor

decreases.Thesameistrueforincreases–scrappricessoftenandthereisnorealconvictionforotherattemptsto

movehigher,”alocalsourcetoldMetalExpert.

Italy: prices for sections and merchant bars of S275JR grade, EUR/t(domesticprices,excl.22%VAT)

Market segment/product Base price Specifications, mm Effective price Month changeDomestic market, EXW

IPN/IPEbeam 120-130 140-220 500-510 0

HEA/HEBbeam 120-130 100-180 500-510 0

UPNchannel 120-130 140-220 505-515 0

Equalangle 50-60 60x60x6-9 470-480 –30

Flatbar 50-60 40x8-30 460-470 –30

Roundbar 50-60 14-30 475-485 –30

Backtotop

Sweden’s SSAB posts strong Q1 results, optimistic for Q2

NorthEurope/FlatProducts

HighersteelpricesinQ12017droveupSSAB’searnings,butmostlythankstotheEuropeandivision.Forecastsof

furthergrowthmaketheproduceroptimisticaboutitsQ2financialresults.

SSABhaspositiveoutlookforQ2asdemandinAmericaandEuropeisexpectedtostaystrong.Besides,thecompa-

nyissuccessfullyfollowingitscostreductionprogramme,aimingtoreduceitsnetdebtbySEK10millionbetweenthe



Europe

startofthefirstquarterof2016andtheendof2017.“Wehavenowenteredthenextphaseinexecutingour“Taking

theLead”strategy…Ourgoalisindustry-leadingprofit-

ability…At thesametime,wewillcontinuetogrow in

SpecialSteelsandAutomotivesegment,”SSAB’sCEO

MartinLindqvistsaidinthereport.

ThecompanyhadastrongQ12017,owing toasolid

earningsimproveofitsEuropeandivision.Steelprices

increaseamid better demand inEurope resulted in a

26%growthinsalesandalmostan8-foldriseinEBITin

January-March2017.

SSABSpecialSteelsalsopostedhigherearningsdriven

by growing customer demand for premiumproducts,

MetalExpertlearnt.

ApositiveeffectfromhighersteelpricesinNorthAmer-

icawasoffsetbythecostsoftheplannedmaintenance

outageattheMobileassetandhigherscrapprices.As

a result, SSABAmerica posted an operating loss of

SEK 157millionovertheperiod.

Backtotop

Key operational results of SSAB in 2016, SEK million(EUR1=SEK9.62)

Indicator 2017 Q1 2016 Q2 Y-o-y, %Sales 15,739 12,964 +21

incl.SSABSpecialSteels 3,925 3,132 +25

incl.SSABEurope 7,657 6,04 +26

incl.SSABAmericas 3,019 2,428 +24

Steel shipments, 000 t 1,745 1,677 +4

incl.SSABSpecialSteels* 277 256 +8

incl.SSABEurope* 982 946 +4

incl.SSABAmericas* 486 475 +2

EBIT 702 –193 -

incl.SSABSpecialSteels 243 202 +20

incl.SSABEurope 826 –118 -

incl.SSABAmericas –157 55 -

EBIT/t 402 –115 -

incl.SSABSpecialSteels 877 789 +11

incl.SSABEurope 841 –125 -

incl.SSABAmericas –323 116 -

*–externalsales



Taiwan’s E United Group to invest $1.65 billion in new US steel mill

USA/SteelSemis

EUnitedGroup,oneofTaiwan’sleadingconglomerates,intendstoentertheUSmarketbybuildingasteelmillinthe

countryfollowingthecompany’slong-termdevelopmentstrategyforexpansionandfuturesustainability.

TheproducerplanstoinvestaboutTWD50billion($1.65billion)intheinstallationoftwosteelarcfurnacesinasouth-

easternUSstate.Thenewmillwillhaveacapacityof1.5milliontofcarbonsteeland1milliontofstainlesssteelper

year,MetalExpertlearntfromthecompany’sspokesperson.Asfornow,EUnitedGroupsubmittedaninvestment

proposaltotheUSauthoritiesdetailingtheland,waterandpowersuppliesrequiredfortheproject.Althoughthereare

nodetailsabouttheprojectedlocationoftheinvestmentyet,thecompanyhasconfirmedthatitconsidersTexasas

theprioritystate.“TheOfficeoftheGovernorofTexaswasofferinganumberofplotsoflandforourreview.Weare

planningtotraveltoTexasinMayforsitevisits,”thecompanysaidtoMetalExpert.

EUnitedGroup’sinvestmentplanfollowspersistentmediareportsaboutplansofotherTaiwan’scompanies,inpar-

ticularApplesupplierHonHaiPrecisionIndustryCo.andTaiwanSemiconductorManufacturingCo.,topreparemajor

investmentprojectsintheUSbasedontherecentsignalsfromTrump’sadministrationthatwantstopromotetheuse

ofdomesticallyproducedsteelinnewinfrastructureprojects.

Backtotop

Venezuelan HBI price higher in contracts, may soften soon

SouthAmerica/DRI&HBI

VenezuelanHBIproducersmanagedtoachieveaslightlyhigherpriceinrarecontractswithforeignconsumers.Atthe

sametime,thereareexpectationsthatpricesmaysoftenoverthecomingweeksamidweaknessinmainsalesmarkets.

Inmid-April,twobatchesofVenezuela-originHBIforMayshipmentweresoldtoMediterraneanbuyersat$215/tFOB,

whichis$3/thigherfromthelate-Marchcontractlevel,MetalExpertlearnt.Nonetheless,thepriceswillhardlystayat

theachievedlevelamidthecurrentsteelmarketconditions.

Bytheendofthemonth,HBIquotesmightbeadjustedto$210/tFOB,withafurtherdecreasebeingpossibleindeals.

“Thisweekabuyerwasbiddingat$207/tFOB,butthepricereceivednoresponseinthesegmentyet,”asourcein

Venezuelasaid.

Backtotop

In brief: AK Steel increases premium product mix for automotive sector

USA/FlatProducts

USAKSteel,oneofthemajorUSflatsteelproducers,isexpandingitsautosteelportfoliobylaunchinganewhigh-

strengthsteelproduct.ThecompanyintroducednewNEXMET1000and1200AdvancedHighStrengthSteelforuse

inautomotivestructuralcomponents,whicharegoingtobeproducedatDearbornWorks,Michigan,MetalExpert

learnt.ThenewproductwillhelpAKSteelbetterserveneedsofthegrowingautomotiveindustrytakingintoaccount

increasinglystringentemissionsregulationsintheUSAandcustomers’demandforlightweightapplications.“These

newNEXMET1000and1200productsareevidenceofAKSteel’sworktodriveinnovationinthesteelindustry,and

remainattheforefrontofcarbon,stainlessandelectricalsteeltechnology,”RogerNewport,ChiefExecutiveOfficer

ofAKSteel,said.

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Americas



WSA: global steel demand to grow in 2017-2018, but at slow pace

Global/Longproducts,FlatProducts

TheWorldSteelAssociation(WSA)releaseditsshort-termoutlookfor2017and2018.Itexpectstheglobalsteelde-

mandtokeeprisingin2017andin2018asconsumptionwillgrowinalmostallmarkets.Yet,thegrowthratewilllag

behindtheGDPgrowth.

Afterastronger thanexpectedsteeldemandrecovery lastyear,WSApredictsa“cyclicalupturn insteeldemand

withacontinuingrecoveryinthedevelopedeconomiesandanacceleratinggrowthmomentumintheemergingand

developingeconomies”in2017and2018.Theworldsteelconsumptionwillriseby1.3%in2017andanother0.9%in

2018,accordingtotheWSAforecast.Thisis,however,belowtheforecastglobalGDPgrowthofaround3.5%in2017

and2018,whichWSAexplainstobe“inthecontextofthestructuralchangesoftheglobalsteelindustryinthepost

crisisperiod.”

HighhopesareforRussiaandBraziltomoveoutoftheirrecessionsandtoshowamodesteconomygrowthin2017,

MetalExpertlearnt.Overall,thehighestgrowthofdemandisseenindevelopingeconomies(excludingChina),the

CIS,SouthAmerica,theMiddleEastinparticular.China’ssteeldemand,onthecontrary,willnotgrowovertheperiod

duetoeconomyrebalancing,WSAsaid.

Asforthedevelopedeconomies,WSApredictsthatsteeldemandwillcontinueincreasingslowlyin2017and2018,

adding0.7%and1.2%,respectively,withaleadingroletobeassignedtotheUnitedStateswhichis“benefittingfrom

strongfundamentals,newlyannouncedmeasuresrelatedtofiscalstimuliandrisinginfrastructurespending,”

Steel demand forecast, by region, million t

Region 2017 Y-o-y 2018 Y-o-yAsiaandOceania 1016.0 1% 1015.0 –0.1%

China 681.0 0.0% 667.4 –2.0%

EU(28) 158.2 0.5% 160.4 1.4%

NAFTA 135.2 2.2% 138.5 2.4%

CIS 50.2 3.2% 51.9 3.4%

CentralandSouthAmerica 40.8 3.5% 42.7 4.7%

RestofEurope 41.7 2.6% 43.2 3.5%

MiddleEast 54.8 3.1% 56.8 3.7%

Africa 38.4 1.5% 40.0 4.1%

World 1,535.2 1.3% 1,548.5 0.9%

Source:WorldSteelAssociation

Backtotop

World


http://metalexpert.com/en/products/CIS-Steel-News%26RelevantIssue%3DE4091FE8E07F9708C2257FD2004CD733


Steel product and raw material global prices, $/t

Commodity* Market, delivery basis 21.03.2017 W-o-w change 28.04.2017 05.05.2017forecast for two weeks

Semi-finished products

Billet,125-150mm CIS,export,FOBAzov/BlackSea 375-380 i 375 375

Billet,150mm China,export,FOB 390-400 i 385-390 400-410

Billet,125-150mm Turkey,importfromCIS,CFR 385-400 i 385-395 385-395

Billet,150mm Turkey,importfromChina,CFR 400 i 400-405 395-405

Slabs,200-250mm Taiwan,import,CFR 420 i 400-410 395-405

Long products

Rebar,8-32mm Turkey,export,FOB 420-425 i 415-425 410-420

Rebar,12-25mm Ukraine,export,FOB 415 i 405-410 410

Rebar,10-20mm USA,importfromTurkey,CFRTW 485-490 i 480-490 475-485

Rebar,12-32mm Germany,domestic,CPT(EUR) 480-490 – 470-480 470-480

Wirerod,drawing/meshquality,5.5-10mm

Ukraine,export,FOB 435-440 i 430 430

Flat products

HRcoil,over3mm China,export,FOB 420-435 i 405-420 420-430

HRcoil,over2mm Russia,export,FOBBlackSea 450-460 i 440-445 440

HRcoil,over2mm Ukraine,export,FOBAzov/BlackSea 450-460 i 440 440

HRcoil,over2mm USA,domestic,EXW 716-727 – 716-727 716-727

HRcoil,base Germany,domestic,EXW(EUR) 550-560 – 540-550 540-550

HRcoil,base Italy,domestic,EXW(EUR) 520-530 – 510-520 510-520

HRcoil,over2mm Italy,import,CFR(EUR) 485 – 480 480

HRcoil,over3mm Turkey,domestic,EXW 505-525 i 500-510 495-510

HRcoil,over2mm Vietnam,import,CFR 410-420 i 400-420 400-410

CRcoil,0.5-1mm Russia,export,FOBBlack/BalticSea 510-530 i 500-510 500

CRcoil,1mm China,export,FOB 450-460 i 440-450 440-450

Plate,over20mm China,export,FOB 425-440 i 420-430 420-430

HDGcoil,Z120,1mm China,export,FOB 530-540 i 520-530 520-530

Raw materials

Ironore,62%Fe China,importfromAustralia,CFR 66.5 i 67.5 68

ScrapHMS1&2(80:20) Turkey,importfromUSA,CFR 265 i 265 265-275

ScrapHMS1&2(75:25) Turkey,importfromEU,CFR 255-260 – 255-260 260-265

ScrapHMS1&2(80:20) Turkey,importfromBalticregion,CFR 265 i 265 265-275

ScrapHMS1&2(80:20) USA,export,FOBEastCoast 251-256 i 251-256 251-261

ScrapHMS2 Japan,export,FOB(JPY) 27,000 i 26,000-27,000 26,000-26,500

Pigiron USA,import,CFR 395-400 – 395-400 395-400

Hardcokingcoal Australia,export,FOB 260-280 i 240-250 230-240

*–billet–ST-37;rebar–ASTMA615(gr.40)oranalogue;wirerod–SAE1008orSAE1006;HRC–EN10025(S235JR)oranalogue(Vietnam–SAE1006B);CRC–EN10130(DC01);Plate–EN10025(S235JR)SAE1006B;HDG–DX51Doranalogue.

Clickheretoreachdetailedhistoricaldata-base

Backtotop

Clickheretoreachdetailedhistoricaldata-base

Prices


http://metalexpert-group.com/createquery_en.html%2526part%253DSteel

http://metalexpert-group.com/createquery_en.html%2526part%253DSteel


Eurometal: “Consumption mood in Europe is rather positive”

Anna Smyk, Metal Expert, Duesseldorf

Eurometal, the voice of European intermediation, takes under its wings 18 na-

tional associations and represents interests of about 3,000 steel distributors and

service centres. EU steel distribution is a vital part of the market chain between

200 steel and tube producers and more than one million end users.

During the 3rd Steel Plate Conference Europe in Duesseldorf, Germany, on March

10, Metal Expert took an opportunity to communicate with Mr. Georges Kirps,

Director General of Eurometal, and discussed with him the current situation in

European distribution and its prospects.

How was the year of 2016 for European distribution? What peculiarities in

the performance of different regions could you point out?

Theyearof2016wasamixedoneforEuropeandistribution.Multi-product&proximitysteeldistributionshipments

grewbyabout1%.Atthesametime,forflatsteelservicecentres,itwasabetteryearbecauseshipmentsincreased

by2-3%onaveragein2016.

Regardingregions,IwouldsaythatSouthernEuropestartedtocomeback.CentralEuropewasnottoobad.Nordic

regionsalsohadrathergoodperformance.Meanwhile,businessactivityintheUKandFrancesloweddown.

The EU steel producers demand increasingly more trade protection amid a glut of steel imports. What changes

could we see in steel distribution in this regard?

Theproblemofsteeldistributorsinlightofsteeltradecasesisthatmostprobablyitsimpactwillresulttothelimited

supplyofcommodityproducts.Thismayleadinsomesectorstodisruptionsinthesupplychainstoend-users.Imports

havealwaysbeenapartofEUplatemarketsupply.Historicallynon-EUimportsinplatesegmentaccounted15-20%

ofthetotalmarketsupply.Ithasbeentremendouslysurgingwiththemarketshareof26.2%and27.8%overtheyears

2015and2016,respectively.

Atthesametime,tradecasesareessentialforEUsteelindustry.Antidumpingdutieshavehelpedtoreduceimports

fromChinabutthereisalsoanoppositeeffectbyincreasingshipmentsfromIndia,Russia,Brazil,Indonesia,etc.If

youlookatthelastinformationreleasedbyEurofer,theycarefullyexaminethestatisticsandhavealreadyseena

ratherspectacularincreaseintheimportsfromotherdestinations.So,Iwouldn’texcludefurthertighteningoftrade

measures,whichsurelyinfluencedistributors.

Distribution is experiencing the real boom of digital technologies and on-line trading. What changes have they

already brought to traditional distribution and how do you see the future development?

Digitalizationissuitableforthebusinessmodelinsteeldistributioncalledproximitybusiness.Clearly,somesuccess

hasbeenalreadyachievedtherewithsomecompaniesintroducingdigitalizationande-commerceintotheirbusiness

models,somebigdistributorsinGermanyinparticular.Thisbusinessmodelletsmallercustomersordertinyvolumes

ofsteel.So,e-commerceisawaytoconsistcustomers.

Interview

Mr. Georges Kirps, Director

General, Eurometal



Interview

Ontheotherhand,distributionbusinessisalsorelatedtocontractbusiness.Fromthispointofview,thiskindofactiv-

ityinmytodayperceptionsuitslesstobeintroducedintoe-commerce.Forthetimebeingmajorprocessorsinsteel

distributionfor instancetypicalsteelservicecentreswhichsupply industrialcustomers,seefeweropportunitiesin

digitalization.Meanwhile,thismightchangeinfuture.Itisreallysomethingthatisgoingtohappeninsteeldistribution.

European distributors serve more than 1 million customers; construction and automotive industries are

among the main consumers. What prospects do you see for these segments? What other sectors could be

considered as promising?

Weseethatdistributionintheconstructionsectorisimprovingin2017.Weexpectitwoulddevelopoversomeyears

aheadatleast.

Europeanautomotivemarketwillnotbebad.Atthesametime,automotivesuppliersdoalotofbusinesswiththeUK,

theUS,andChina.Inthisregard,therearesomequestionmarks.NobodyknowshowthetaxwillchangeafterBritain

willquittheEU.Ontheotherhand,thefutureoftheChinesemarketfortheautomotiveindustryisunclearaswell.

Asapromisingsector,IseemechanicalengineeringasconsumptionmoodinEuropeisratherpositive.Moreover,

Europeanmechanicalproducers fromGermany, Italy,FranceandSpainaresellinga lotofproducts to theworld

marketwhichisgoodperformed.

Ibelieveonemoreperspectiveconsumingsectoriswhitegoods.

Distributors provide 59% of EU market supply in plates. How do you see the development of this segment in

2017 and next coming years?

In2016Europeanmarketsupplyinplatesreached10milliont,whichisanincreaseof3.1%comparedto2015.The

number10milliontexcludespre-materialofaround2milliont,whichmillsdelivertothetubemillsbecausethose

volumesarenotavailablefordistributors.Butiftocomparethisnumberwith2008whenmarketsupplywasat12.2 mil-

lion t,youseethatnowin2016wearestill15-20%belowgoldenagethattheEUreachedin2007-2008.So,welost

alotin2009and2010.However,from2011wearerecoveringstepbystep.

End-usersinplatesegmenthavetheintentiontogetsmallervolumesofmaterialatshortleadtimes.Andthesetwo

pointsarethemainreasonswhytheshareinfavourofsteeldistributioninEUhasdevelopedalittlebitinthelast

yearsandwillmaintaintogrow.Europeanplatemillsareproducingbigvolumesandtheyarestrugglingtosellbiglots

aswell.Ifyougotoamillwithanaimtoorderminimalvolume,youwillhavetowaitformaterialbetween6-8weeks

forcommodities.Forpremiumproducts,deliverytimecanrangebetween3-6monthsdependingonaproducer.But

end-usershavenotimetowait.That’sanargumentinfavourofdistributorswhichhavestocks,additionalprocessing,

andservices,capablecarryingalsothelogisticsforsmallordersatashortdeliveryperiod.

Backtotop



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