Business confidence deteriorates in sevral emerging steel marketsMetalist
Business sentiment is deteriorating, in Turkey. Domestic steelmakers pushed for price increases, this month, to offset the depreciation of the local currency against the US dollar. However, steel-consuming engineering and manufacturing firms are reluctant to increase production capacity in the absence of sustainable end-user demand. Sales to the construction sector is subdued.
Procurement activity in Brazil is lethargic. MEPS detects little evidence of an imminent upturn in end-user demand. New public works contracts are scarce. Bearish local traders stress that sales volumes are forecast to be stable, at best, in the short term. Consequently, they are unwilling to build inventories, at present.
Challenging trading conditions persist, in the Russian Federation. Local steelmakers indicated to their customers that further upward price adjustments are likely if input costs continue to rise. The situation is exacerbated by the weakness of the local currency. Several bearish trading houses are now destocking, using the current high transaction values, to boost profit margins.
The business environment is improving, in India, owing to the imminent end of the monsoon season. Nonetheless, buyers remark that the recent upward trend in domestic mill transaction values is unsustainable and does not reflect real demand. As the month progressed, the gap between domestic offers and bids made it difficult for any new transactions to be concluded. Traditionally, sales volumes begin to improve from mid-October onwards.
The trading climate remains challenging in Ukraine. Stockists are highly critical of the pricing strategies being employed by their flat product suppliers. Support from offshore buyers is restricted.
The trading environment remains challenging, in the United Arab Emirates. Local trading houses are in little hurry to replenish their stocks. They are uncertain about the future prospects for industrial activity and construction work, in October. Export opportunities remain limited outside the GCC region.
South African distributors are booking for only immediate requirements, citing deteriorating economic fundamentals. They contend that the latest price initiative undertaken by ArcelorMittal South Africa (AMSA), for October deliveries, would escalate import tonnages.
The prognosis for the Mexican market is unchanged. Domestic stockists are optimistic that trading volumes of finished long products will increase in November. Heavy rainfall slowed down construction activity, this month. Buyers contend that current price levels are unsustainable and that a correction is inevitable.