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www.metalbulletinresearch.com
A unique source of market intelligence, analysis and forecasts covering the international ferro- alloys industry
MONTHLY UPDATE
Ferro-alloy price forecasts 4
Crude steel highlights 5
Ferro silicon highlights 7
Silicon metal highlights 8
Stainless steel highlights 11
Ferro-chrome highlights 15
Nickel highlights 16
Molybdenum highlights 17
Vanadium highlights 18
Tungsten highlights 18
Ferro-chrome, nickel & molybdenum supply/demand 19
As expected, the mood at Metal Bulletin’s International Ferro-alloys Conference earlier this month in Prague was decidedly glum. Market participants seemed resigned to the inevitability of further price declines to come, and accepting of prolonged weakness in their markets. Despite this gloomy outlook, new entrants to the market are optimistically highlighting the need for their new capacity, much to the chagrin of established ferro-alloy producers. New ferro-silicon and manganese alloy projects in Malaysia, new vanadium capacity in Brazil, and planned silicon metal capacity in Iceland were all topics for discussion at the event.
A key question is just how low alloy prices will fall. In some markets, there seems to be no floor, given the by-product nature of a significant proportion of total output. South African UG2 chrome ore is produced as a by-product of platinum mining, and more than 60% of the world’s molybdenum production is a by-product of copper production. The pricing collapse in these two markets in particular this year is unsurprising.
The immediate outlook for ferro-alloy pricing is negative, with significant stock liquidation underway as traders and stockists look to clear alloys before the end of the year. The result has been significant pricing losses which have accelerated in the past two weeks. While ferro-alloy prices are likely to trend lower for the next several weeks, we should see most prices find a floor by the end of the year, with stable pricing emerging, at least temporarily, early next year. Reduced energy costs in most alloy producing nations are protecting ferro-alloy producers to some degree, enabling them to cut prices in order to maintain market share in an over-supplied market. On the downside, these lower energy costs are also delaying the inevitable production cuts that must occur in ferro-alloy markets for any sustainable price improvement to occur.
European ferro-alloy price forecasts ($/tonne) Source: Metal Bulletin Research
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FeSi 75% SiMn 65-70% HC FeCr 60% Forecast prices
Bulk alloy prices to exhibit further declines in the final weeks of 2015 before posting modest improvement in early 2016
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WWW.METALBULLETINRESEARCH.COM NOVEMBER 2015 MBR FERRO-ALLOYS MARKET TRACKER
3 2012 2013 2014 2015 Year Year Year Apr May Jun Jul Aug Sep Oct Nov
EUROPEAN FREE MARKET PRICES(1,3)
Ferro-silicon, 75% Si €/t 1,130 1,094 1,139 1,208 1,221 1,197 1,177 1,160 1,125 1,049 968 Ferro-manganese, 78% Mn €/t 906 773 746 724 735 761 763 745 747 718 660 Silicon Metal, min. 98% Si, 10-20 tonne lots €/t 2,054 1,987 2,184 2,415 2,389 2,378 2,378 2,378 2,378 2,150 2,150 Silico-manganese, 65-75% Mn €/t 946 847 834 841 839 823 809 775 750 687 623 Medium-carbon ferro-manganese, 80% Mn €/t 2,012 2,013 2,014 1,105 1,085 1,085 1,085 1,050 1,020 980 980 Charge chrome, 52% Cr $/lb 1.21 1.16 1.18 1.08 1.08 1.08 1.08 1.08 1.08 1.04 1.04 Ferro-chrome, 6-8% C, 60% Cr $/lb 1.08 0.99 1.05 0.99 0.98 0.95 0.96 0.94 0.89 0.88 0.83 Ferro-chrome, 0.1% C, 68-70% Cr $/lb 2.23 1.98 2.10 2.05 2.02 2.01 2.01 2.01 1.99 1.99 1.98 Nickel, LME cash(4) $/lb 7.95 6.80 7.65 5.80 6.23 5.85 5.16 4.69 4.49 4.48 4.39 Nickel, 3-month forward(4) $/lb 7.98 6.83 7.68 5.83 6.25 5.86 5.19 4.71 4.51 4.69 4.40 Manganese min 99.7% EMM flake $/t 2,814 2,313 2,243 1,989 1,788 1,815 1,780 1,667 1,627 1,630 1,488 Ferro-molybdenum, 65-70% Mo $/kg 31.42 25.88 28.53 20.04 19.29 18.16 15.37 14.85 14.63 12.90 12.53 Molybdenum metal, LME cash(4) $/t 28,280 22,953 25,577 17,295 17,012 15,316 12,716 13,143 12,545 10,520 10,750 Molybdenum metal, LME 3-month forward(4) $/t 27,773 22,471 25,077 17,295 17,226 15,399 12,736 13,164 12,552 10,520 10,750 Molybdic oxide, drummed(4) $/lb 12.77 10.35 11.45 7.98 7.65 7.01 5.91 5.83 5.76 4.77 4.69 Ferro-titanium, 70% Ti $/kg 7.40 6.36 6.04 5.58 5.39 5.26 4.97 4.93 4.77 4.41 4.08 Ferro-tungsten, 75% W(4) $/kg 48.86 45.38 41.92 34.31 32.69 29.54 27.83 26.69 24.78 23.00 21.88 Ferro-vanadium, 70-80% V $/kg 25.00 27.70 25.52 19.39 22.23 22.10 19.64 18.24 15.87 13.92 13.20 Vanadium pentoxide, min 98% $/lb 5.59 6.00 5.46 3.80 4.01 4.25 3.83 3.43 3.07 2.76 2.59
US FREE MARKET PRICES(1,5)
Ferro-silicon, 75% Si $/lb 0.91 0.93 0.97 0.91 0.90 0.88 0.85 0.85 0.83 0.80 0.79 Silicon metal $/t 2,903 2,734 3,081 3,094 3,035 2,965 2,894 2,819 2,734 2,615 2,590 Ferro-manganese, 78% Mn $/t 1,224 1,063 1,060 954 940 927 877 875 838 838 825 Silico-manganese, 65-75% Mn $/t 1,384 1,157 1,277 1,149 1,138 1,119 1,082 1,064 978 933 882 Medium-carbon ferro-manganese, 80% Mn $/lb 0.94 0.88 0.94 0.97 0.97 0.94 0.91 0.91 0.91 0.86 0.86 Ferro-chrome, 6-8% C, 60-65% Cr $/lb 1.12 1.01 1.13 1.10 1.10 1.10 1.09 1.07 1.08 1.05 1.05 Ferro-molybdenum, 65-70% Mo $/lb 14.87 11.86 14.15 9.33 8.85 8.33 7.43 7.02 6.81 6.29 6.08 Molybdic oxide, canned $/lb 12.78 10.41 11.71 8.06 7.62 7.24 6.01 6.08 5.88 4.91 4.72 Ferro-vanadium, 70-80% V $/lb 14.14 13.17 13.07 9.98 9.84 9.75 9.53 9.00 8.43 7.72 6.70
CHINESE PRICES(6)
Ferro-silicon min 75% export fob $/t 1,383 1,391 1,377 1,264 1,230 1,230 1,218 1,201 1,175 1,187 1,135 Ferro-silicon min 75%, Free Market RMB/t 6,184 6,175 5,881 5,019 4,915 5,200 5,195 5,031 4,850 4,808 4,450 Ferro-manganese min 65% Mn, Free Market RMB/t 6,560 6,154 5,683 4,813 4,650 4,600 4,460 4,150 4,050 4,050 3,950 Silico-manganese min 65% Mn, Free Market RMB/t 7,254 6,786 6,370 5,569 5,300 5,300 5,145 4,975 4,825 4,800 4,488 Silicon metal min. 98.5% export fob Chinese ports$/t 2,176 1,941 2,102 1,987 1,985 1,858 1,774 1,639 1,610 1,619 1,568 Ferro-chrome 6-8% C, 50% Cr* $/lb 0.91 0.87 0.81 0.79 0.78 0.78 0.77 0.76 0.74 0.71 0.69 MB Ferro-chrome 6-8% C, 50% Cr index $/lb 0.90 0.89 0.89 0.79 0.78 0.78 0.78 0.76 0.74 0.71 0.69 Molybdenum concentrate 45% Mo RMB/mtu 1,636 1,518 1,333 1,101 1,067 1,021 899 830 819 774 703
BULK ORE PRICES
MB Manganese Ore Index 44% Mn, CIF Tianjin $/mtu 4.90 5.42 4.51 3.09 3.02 3.00 3.02 3.04 2.93 2.75 2.29 MB Manganese Ore Index 38% Mn, FOB Port Elizabeth$/mtu 4.16 4.00 3.34 2.44 2.27 2.27 2.20 2.19 2.19 2.12 1.64 Chrome Ore South Africa UG2 Met 40% (7) $/t 188 165 165 160 158 160 159 158 149 142 132
EXCHANGE RATES
Dollar/sterling $/£ 1.59 1.56 1.65 1.50 1.55 1.56 1.56 1.56 1.53 1.53 1.52 Yen/dollar ¥/$ 79.81 97.60 105.89 119.51 120.83 123.68 123.32 123.05 120.08 119.77 122.31 Dollar/euro $/€ 1.29 1.33 1.33 1.08 1.12 1.12 1.10 1.11 1.12 1.13 1.08
Source: Metal Bulletin Research Notes: Current month's averages are to the 13th (1) Tonnage prices are bulk basis; lb or kg prices are metal contained (3) Delivered basis, except (4) in warehouse (5) in warehouse, Pittsburgh (6) export prices are fob main Chinese ports, free market prices are in warehouse China (7) cif main Chinese ports * Ferro-chrome China domestic spot 6-8% C, basis 50% Cr delivered duty paid
MARKET PRICES & EXCHANGE RATES
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MBR FERRO-ALLOYS MARKET TRACKER NOVEMBER 2015 WWW.METALBULLETINRESEARCH.COM
4 FERRO-ALLOY PRICE FORECASTS Forecast Bulk Ferro-alloy Prices
Ferro-silicon Silicon metal Ferro-manganese Silico-manganese Mn Ore 75% Si min 98% Si 78% Mn 65-75% Mn 44% Mn
EU (€/t) USA ($/lb) EU (€/t) USA ($/t) EU (€/t) USA ($/l.ton) EU (€/t) USA ($/t) ($/mtu) Nov-14 1,180 0.97 2,310 3,219 733 1,060 848 1,257 4.35 Dec-14 1,199 0.94 2,320 3,219 708 1,040 836 1,213 4.33 Jan-15 1,209 0.94 2,355 3,213 727 1,041 846 1,204 4.20 Feb-15 1,228 0.93 2,414 3,198 746 1,036 842 1,202 3.76 Mar-15 1,207 0.93 2,415 3,131 718 1,026 834 1,199 3.52 Apr-15 1,208 0.91 2,415 3,094 724 954 841 1,149 3.09 May-15 1,221 0.90 2,389 3,035 735 940 839 1,138 3.02 Jun-15 1,197 0.88 2,378 2,965 761 927 823 1,119 3.00 Jul-15 1,177 0.85 2,378 2,894 763 877 809 1,082 3.02 Aug-15 1,160 0.85 2,378 2,819 745 875 775 1,064 3.04 Sep-15 1,125 0.83 2,378 2,734 747 838 750 978 2.93 Oct-15 1,049 0.80 2,150 2,615 718 838 687 933 2.75 Nov-15 968 0.79 2,150 2,590 660 825 623 882 2.29 Dec-15 950 0.72 2,100 2,523 640 800 580 800 2.10 Jan-16 1,000 0.74 2,150 2,580 640 775 600 800 2.00 Feb-16 1,050 0.76 2,200 2,636 660 786 625 825 2.00 Mar-16 1,100 0.76 2,250 2,693 680 788 650 850 2.20 Apr-16 1,125 0.76 2,225 2,664 680 788 650 850 2.35 May-16 1,125 0.76 2,225 2,664 680 788 680 825 2.50 Jun-16 1,110 0.75 2,200 2,636 675 783 680 825 2.45 Jul-16 1,100 0.74 2,200 2,636 675 783 660 800 2.40 Aug-16 1,080 0.74 2,200 2,636 690 800 660 800 2.40 Sep-16 1,060 0.72 2,250 2,693 690 800 680 820 2.45 Oct-16 1,050 0.72 2,250 2,693 690 800 680 820 2.50 Nov-16 1,050 0.72 2,225 2,664 680 788 675 820 2.50 Source: Metal Bulletin Research
Forecast Specialty Ferro-alloy Prices Ferro-chrome Cr Ore Ferro-molybdenum Molybdic Ferro-vanadium Ferro-tungsten
6-8% C, 60-65% Cr Met 40% 65-70% Mo oxide 70-80% V 75% W EU ($/lb) USA ($/lb) UG2 ($/t) EU ($/kg) USA ($/lb) EU ($/lb) EU ($/kg) US ($/lb) EU ($/kg)
Nov-14 1.03 1.13 155 24.06 11.63 9.24 24.47 12.88 36.48 Dec-14 1.02 1.12 154 23.14 11.21 8.99 24.17 12.58 34.83 Jan-15 1.01 1.11 155 22.95 10.86 9.09 23.46 12.55 33.56 Feb-15 1.02 1.10 156 20.45 10.13 8.07 21.47 11.59 32.93 Mar-15 1.00 1.10 158 20.70 9.79 8.23 20.42 11.08 33.65 Apr-15 0.99 1.10 160 20.04 9.33 7.98 19.39 9.98 34.31 May-15 0.98 1.10 158 19.29 8.85 7.65 22.23 9.84 32.69 Jun-15 0.95 1.10 160 18.16 8.33 7.01 22.10 9.75 29.54 Jul-15 0.96 1.09 159 15.37 7.43 5.91 19.64 9.53 27.83 Aug-15 0.94 1.07 158 14.85 7.02 5.83 18.24 9.00 26.69 Sep-15 0.89 1.08 149 14.63 6.81 5.76 15.87 8.43 24.78 Oct-15 0.88 1.05 142 12.90 6.29 4.77 13.92 7.72 23.00 Nov-15 0.83 1.05 132 12.53 6.08 4.69 13.20 6.70 21.88 Dec-15 0.80 1.00 125 12.00 5.44 4.87 12.00 6.44 21.00 Jan-16 0.85 1.03 125 12.50 5.67 5.08 12.75 6.78 21.00 Feb-16 0.88 1.05 130 13.50 6.12 5.48 13.50 7.12 22.00 Mar-16 0.88 1.05 135 13.50 6.12 5.48 14.00 7.35 22.50 Apr-16 0.90 1.07 135 13.00 5.90 5.28 14.00 7.35 23.00 May-16 0.90 1.07 140 12.75 5.78 5.18 13.50 7.12 23.50 Jun-16 0.90 1.07 140 12.75 5.78 5.18 13.50 7.12 24.00 Jul-16 0.88 1.05 145 12.50 5.67 5.08 13.00 6.90 24.00 Aug-16 0.88 1.05 145 12.50 5.67 5.08 13.00 6.90 24.00 Sep-16 0.88 1.05 150 12.50 5.67 5.08 12.75 6.78 24.50 Oct-16 0.88 1.05 150 12.50 5.67 5.08 12.75 6.78 24.50 Nov-16 0.85 1.03 150 12.50 5.67 5.08 13.75 7.24 24.00 Source: Metal Bulletin Research
Forecast Bulk Ferro-alloy Prices Data is only available to
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Forecast Speciality Ferro-alloy Prices Data is only available to
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WWW.METALBULLETINRESEARCH.COM NOVEMBER 2015 MBR FERRO-ALLOYS MARKET TRACKER
5CRUDE STEEL HIGHLIGHTS
Oversupply contnues to weigh on global steel prices
MBR Outlook MBR anticipates global steel prices to remain suppressed in the final quarter of the year, as over-supply in both the semi-finished and finished steel markets persist. Curtailments in output, notably in China, have as yet been insufficient to address the existing imbalance. Steelmakers will likely actively protect their domestic steel industries through increased anti-dumping investigations as exports look to undercut and displace domestic production. Import penetration remains a significant issue. With many nations reluctant to significantly reduce output, it appears supply will continue to outpace demand for some time in spite of mills incurring losses.
SOURCE: METAL BULLETIN RESEARCH
-10%
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0%
5%
10%
15%
SOURCE: METAL BULLETIN RESEARCH
-10%
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0%
5%
10%
15% USA Europe Japan Total world
China produced 66.1Mt of crude steel in October, largely flat compared to the previous month and down 3.1% year-on-year according to data released by the National Bureau of Statistics. Traditionally October has been a peak month for steel production, however, record-low prices and weak demand this year have put mills under increasing financial pressure amid a saturated market. In fact CISA members, incurred losses in excess of RMB25bn ($3.9bn) during Q3 2015. Despite Chinese steelmakers continuing to divert large volumes to export markets this is not proving an economically viable strategy and hence we are beginning to see curtailments in output amid multi-year lows in steel prices and the aforementioned unsustainable losses incurred. In spite of this, further downside risks to iron ore benchmarks could provide some manoeuvrability to producers enabling them to maintain margins albeit at loss-making levels and reducing the rate of crude steel production curtailments.
Meanwhile in the USA, despite a period of destocking of domestic steel inventories, local mills remain negatively affected by finished steel imports, particularly of flat products. Indeed, US imports of flat products increased 17.9% year-on-year during the first six months of the year to 8.1Mt, compared with 6.9Mt in the same period the previous year. In the long products market, imports have climbed 8.4% year-on-year to 3.9Mt over the same period. US crude steel output continues to decline, with output in the Midwest and Southern regions of the USA suffering more acutely than other regions. MBR understands some minimills have scaled back production in response to the influx of competitive imports, while other mills have telegraphed the likelihood of impending idling or shutdowns in the coming weeks and months.
Elsewhere, Russian crude steel production stood at 5.6Mt in October, down 2% year-on-year according to the federal statistics service Rosstat. Indeed Russian producers, like other major producers, have diverted increasing volumes of semi-finished and finished products onto the export market this year amid weak domestic demand. In fact, according to Russia’s Ministry of Industry and Trade, domestic steel consumption is forecast to decline by 11% over the course of year, compared with 43Mt consumed during 2014. MBR understands Russian producers diverted increasing volumes away from the merchant pig iron market during the third quarter in order to increase production of semi-finished steel products, owing to favourable margins on these products.
Crude Steel Highlights Market Outlook information is only available to paying subscribers.
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MBR FERRO-ALLOYS MARKET TRACKER NOVEMBER 2015 WWW.METALBULLETINRESEARCH.COM
6 GLOBAL CRUDE STEEL PRODUCTION
2013 2014 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15
Belgium 7.09 9.52 1.80 1.86 1.79 1.94 1.91 1.76 0.71 0.61 0.67 0.63 0.58 0.58 0.60
France 15.69 16.14 4.21 3.86 3.98 4.02 4.14 3.71 1.44 1.31 1.45 1.38 1.42 1.04 1.25
Germany 42.64 42.94 11.20 10.07 10.39 11.06 11.09 10.43 3.87 3.61 3.71 3.77 3.61 3.43 3.38
Italy 24.48 23.71 6.48 5.25 5.36 5.97 5.75 4.93 2.10 1.83 2.00 1.92 1.85 1.00 2.08
Spain 11.93 14.25 3.93 3.21 3.46 3.85 3.98 3.28 1.40 1.33 1.38 1.27 1.00 1.00 1.28
United Kingdom 11.76 12.20 2.96 3.12 2.87 3.14 3.05 2.46 1.12 0.92 1.11 1.02 0.95 0.93 0.58
Other Europe 98.31 91.98 22.22 21.99 22.40 22.20 23.25 21.20 7.78 7.59 8.10 7.56 7.19 6.93 7.08
Total Europe 211.90 210.76 52.80 49.34 50.26 52.19 53.16 47.77 18.40 17.21 18.41 17.54 16.60 14.91 16.25
% Change Y-o-Y 0.08 -0.5% -2.7% -3.2% -7.3% -4.5% 2.0% -9.4% 0.0% -0.6% 1.9% 0.7% -1.3% -2.1% -6.0%
Canada 12.42 12.73 3.13 3.35 3.17 3.03 3.26 3.29 1.06 1.12 1.07 1.07 1.07 1.10 1.12
USA 86.95 88.17 21.98 22.75 21.82 19.88 20.10 20.67 6.43 6.41 6.84 6.84 6.99 7.00 6.68
Total N America 99.38 100.90 25.11 26.09 24.99 22.91 23.36 23.96 7.50 7.53 7.91 7.91 8.05 8.10 7.80
% Change Y-o-Y -0.11 1.5% 2.6% 3.1% 0.7% -21.9% -20.9% -24.6% -12.2% -7.7% -7.3% -5.9% -8.6% -8.6% -7.4%
Latin America 64.14 65.30 15.92 16.35 15.80 15.71 15.80 15.74 5.26 5.11 5.46 5.22 5.37 5.30 5.07
% Change Y-o-Y -1.2% 1.8% -0.7% -2.3% -0.2% -1.6% -0.8% -3.7% -7.3% -4.2% 1.4% 0.6% -1.7% -3.5% -6.0%
Japan 110.58 110.67 27.67 27.89 27.54 26.74 25.85 26.21 9.28 8.40 8.92 8.53 8.84 8.80 8.57
India 80.72 83.20 22.32 22.38 21.78 22.50 22.72 22.58 7.80 7.53 7.69 7.51 7.66 7.66 7.26
South Korea 66.05 71.54 18.47 17.37 17.87 16.91 17.63 17.60 5.93 5.74 6.02 5.86 6.06 5.92 5.62
Taiwan 22.35 23.25 5.72 5.75 6.21 5.84 5.57 5.47 2.08 1.88 1.90 1.80 1.86 1.86 1.76
China 815.36 820.55 211.42 205.85 198.91 201.16 209.04 198.93 70.54 69.05 70.81 69.18 65.87 66.94 66.12
Total Asia 1,095.29 1,109.21 285.60 279.24 272.30 273.16 280.82 270.79 95.63 92.60 95.34 92.89 90.29 91.18 89.33
% Change Y-o-Y 1.05 1.3% 4.1% 2.7% -3.8% -1.0% -1.7% -3.0% 0.3% -3.0% -0.7% -1.4% -3.6% -2.8% -2.7%
Africa 16.02 14.61 3.81 3.10 3.55 3.84 3.56 3.36 1.26 1.20 1.20 1.16 1.18 1.17 1.02
Australasia 5.55 5.49 1.30 1.44 1.37 1.37 1.46 1.51 0.40 0.44 0.53 0.48 0.51 0.51 0.50
Russia 69.23 71.46 18.22 18.18 17.87 18.17 17.52 17.62 6.14 5.92 5.93 5.67 6.05 6.05 5.53
Ukraine 32.82 27.17 7.96 6.04 5.66 5.15 6.10 5.85 1.70 1.93 2.17 2.00 1.87 1.92 2.06
Other CIS 6.47 8.43 1.91 1.94 1.75 1.70 2.06 1.74 0.70 0.71 0.69 0.66 0.54 0.63 0.58
World Total 1,600.79 1,613.33 426.81 415.28 407.88 407.58 418.08 401.37 141.28 137.28 142.50 138.30 134.99 134.00 132.38
% Change Y-o-Y 0.8% 5.5% 3.0% -2.2% -1.1% -2.0% -3.3% -1.6% -3.2% -1.1% -1.8% -3.6% -3.0% -3.3%
Source: World Steel Association, Metal Bulletin Research
(million tonnes) Global Crude Steel Production
SOURCE: METAL BULLETIN RESEARCH
Historical and forecast global steel production growth rates (% change y-o-y)
USA US crude steel output plunged 8.6% year-on-year in H1 2015 as the combination of surging imports, the collapse in demand from the energy sector, declining raw material costs, and bloated inventories resulted in sharp finished product price declines, triggering production cuts. US steel mill average operating rates remain around 70-75%.
Europe EU28 crude steel output gained 0.5% in H1 2015, bucking the global trend towards lower steel output. The weak local currency is helping to protect local producers, while reduced raw material costs are also improving EU steelmakers’ competitiveness this year.
Asia Chinese crude steel output is declining, but not at a fast enough pace to prevent more severe output losses in neighboring countries. China is actively exporting excess steel output to other Asian nations, with sharp declines in crude steel output evident in Japan, South Korea, Taiwan and Thailand in response in H1 2015.
Q1 15 Q2 15 Q3 15 Q4 15 (‘m tonnes) 401 410 403 410 (chg yoy) -2% -1% -1% 0%
Global crude…