Purchasing Activity is Lacklustre in
The Emerging Markets
The trading environment,
in Brazil, remains weak. MEPS’ research indicates resistance to the mills’
pricing initiative from customers. Shipments to automotive suppliers and white
goods manufacturers are tepid. Despite this, service centres expect local steel
manufacturers to target an upturn in selling values, in the near term. Supplies
from third country sources are limited.
The outlook for the Russian market is unchanged. Local consumption is tepid.
Buyers are postponing order placement in the hope of reduced prices in the
future. They assert that the recent advances are not supported by increased
market demand. Inventory levels are high. Traditionally, the September/October
period is the last opportunity for these firms to improve their sales
performance before the onset of the winter trading cycle.
The business environment is unpredictable, in India. Fierce competition amongst
domestic flat steelmakers is providing local buyers with the opportunity to
procure material, at below official offer levels. Long product inventories are
still above current market requirements. Demand, from the construction sector,
is subdued. Delivery lead times are very short. Traditionally, sales volumes
begin to pick up from mid-October onwards. Support from offshore buyers is
Chinese service centres are reluctant to purchase material, citing unattractive
domestic price quotations and slow underlying demand during the Mid-Autumn
Festival. Meanwhile, the government is expected to announced production cuts and
stricter rules on pollution, ahead of the country’s national holiday (Golden
Week Holiday – from October 1 to 7).
The trading climate is challenging, in Ukraine. Automotive and construction
activity is below last year’s numbers. Distributors are hoping that industrial
demand will pick up, in the coming months. The local association of metal
producers, Metallurgprom, reports that finished steel production, in August
2019, totalled 1.537 million tonnes – up 1.7 percent, month-on-month.
Business confidence is low, in Turkey. Distributors and traders are sceptical
regarding the prospect that buying activity will pick up, in October – citing
weak economic fundamentals and subdued underlying demand. The situation is
exacerbated by the instability of the Turkish lira against the US dollar and
volatile import price quotations. Orders from the automotive sector are below
expectations. Price support from foreign customers is limited.
The prognosis for the Emirati steel market is unchanged. Few deals are being
concluded. Domestic stockists are optimistic that trading volumes of finished
products will increase in November. Buyers are purchasing cautiously as import
prices continue to drift downwards. Export opportunities are restricted outside
the GCC region.
The trading environment remains challenging, in South Africa. Purchasing is
slow. Service centres and steel traders are adamant that current price levels
are unsustainable and that a downward correction is inevitable. Building firms
are booking for only immediate requirements, citing weak construction activity
and a shortage of new state-funded infrastructure projects.
Business sentiment is weak in the Mexican steel market. Domestic steelmakers
pushed for price increases, this month, to offset the depreciation of the local
currency against the US dollar. Stock levels, particularly at the service
centres, are too high for current requirements. Demand from several
steel-consuming sectors remains soft – with few signs of any improvement.
Source: MEPS -
Steel Review - September 2019 Issue
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