Section 232 Reservations Unsettle
the Emerging Steel Markets
The trading climate in the Brazilian
steel market is unchanged since our February report. Risk-averse traders plan to
retain minimum inventory in the interim, highlighting that the recent upward
trend in local mill transaction values is unsustainable.
The business environment is challenging, in the Russia. Distributors conveyed
frustration with the price increases proposed by their domestic suppliers. The
latest initiative is viewed as unjustified and is not supported by underlying
demand. We note a reluctance on the part of end-users to commit to forward
Challenging trading conditions persist, in India. Bearish stockists are
reluctant to sign contracts with the mills at the moment. Uncertainties persist
regarding the sustainability of the latest price increases. Correspondingly,
end-users are adopting a wait-and-see approach.
The trading atmosphere is unchanged, in Ukraine. Stockists plan to postpone
purchases until the pricing scenario is more transparent. We note little
appetite for purchasing at present amongst construction firms.
In Turkey, buyers are reluctant to purchase as they would like to get a clearer
picture of the market. Speculation is rife that local steelmakers will persevere
with aggressive pricing positions, in April. Meanwhile, Turkish exporters
conveyed disappointment after the US Department of Commerce released its wire
rod investigation findings. Wire rod products from Turkey were found to have
received countervailing subsidies from the government.
Business sentiment is unchanged, in the United Arab Emirates. Distributors are
holding off purchasing to see how demand develops. Moreover, Emirati rolling
mills kept selling figures unchanged for April’s production programme. Export
opportunities remain limited outside the GCC region.
South Africa’s Department of Trade and Industry (DTI) has stressed that the
country’s steel and aluminium exports do not represent a threat to either US
industry or jobs. As a result, the DTI made a formal submission for exemption
status, in accordance with the Section 232 proclamation. Meanwhile, the South
African Iron and Steel Institute (SAISI) and the Steel and Engineering
Federation of Southern Africa (SEIFSA) highlighted that the exclusion from the
US market put an estimated 310,000, steel related, jobs at risk.
In Mexico, distributors and service centres struggle to adapt to the
unpredictable business environment. The majority are booking for immediate
requirements only, due to continuing price fluctuations. The National Chamber of
Iron and Steel Industry (CANACERO) welcomed the US government’s decision to
temporarily exempt Mexican steelmakers from the Section 232 import tariff.
However, the association expressed concern that the exemption is not permanent,
and is being used as part of the re-negotiation of the North American Free Trade
Source: MEPS -
Steel Review - March 2018 Edition
Free Sample copy
of Developing Markets' Steel Review