National Holidays and General
Elections Stifle End-User Demand in Emerging Markets
In Brazil, the level of
activity varies considerably, depending on region and sector. The Instituto
Nacional dos Distribuidores de Ašo (Inda) reports that, in April 2019, domestic
flat rolled finished steel sales totalled 266,000 tonnes – up 18.1 percent,
compared with the corresponding figure in the previous year. However, the
association is forecasting that, both sales and purchases of flat steel
products, will decline by 5 percent, month-on-month, in May.
Market sentiment in the Russian Federation is, generally, positive. Demand is
solid yet unspectacular. Purchase volumes from the automotive industry are
better than anticipated. Nonetheless, distributors are wary and only order for
their immediate requirements, apprehensive of a downward price correction, in
June and July.
In India, service centres are keeping inventories on the low side. Domestic
sales are tepid. A number of large investment decisions have been postponed
until after the general election. Traditionally, during this period, government
infrastructure spending is on hold and end-users defer forward orders.
The outlook for the Ukrainian market is unchanged. MEPS’ research reveals that
the scale and longevity of any pricing revival will be modest – with political
and economic uncertainty expected to continue to undermine market sentiment. The
local association of metal producers, Metallurgprom, reports that finished steel
production, in April 2019, totalled 1.665 million tonnes – down 1.7 percent,
The trading environment is challenging, in Turkey. Local end-user consumption is
subdued. Buyers at stockists are hesitant about carrying too much inventory
during the next two months. The automotive sector is underperforming, along with
poor demand from general industry. Traditionally, the business climate exhibits
signs of improvement in the last week of Ramadan (ending June 5).
Turkish exporters are still focused on developing new business ties in Europe
and Southeast Asia. The US authorities recently cut the import tariff on Turkish
steel from 50 percent to 25 percent. Nonetheless, Turkish exporters are expected
to face increased competition from their Canadian and Mexican counterparts, as
Section 232 measures have been removed from those two countries.
Procurement activity is slow, in the United Arab Emirates. Business confidence
is lukewarm, deflated by quiet conditions during Ramadan and the approaching
summer holiday season. Day-to-day sales, at the distributors, are low. No upturn
in market activity is foreseen until the end of the summer, at the earliest.
Export opportunities are limited outside the GCC region.
The outlook is unchanged in South African steel market. Domestic consumption is
relatively weak. Little improvement is envisaged for construction and mining
investment, in the near term. Service centre buyers are receiving competitively
priced offers from third country sources.
Business sentiment is lethargic, in Mexico. Service centres are cautious,
maintaining a “wait and see” attitude, shaped by poor underlying demand and
hesitant end-user buying activity. The construction sector continues to
underperform, with few major projects in the pipeline. Meanwhile, the National
Chamber of Iron and Steel Industry (CANACERO) is lobbying the government to do
more to revive the economy, stressing the need for a strong industrial policy.
Source: MEPS -
Steel Review - May 2019 Issue
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