Butch Zeederberg: “UAE will be a net rebar exporter in the future”

Monday, 19 October 2009 14:39:32 (GMT+2)

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At the SteelOrbis Fall 09 Conference & 61st IREPAS Meeting held in Dubai, SteelOrbis had the chance to talk with Butch Zeederberg of Liberty Commodities Ltd, Global Head of Long Products & Scrap, regarding his views on the general market outlook. 

Can you tell us about the activities of your company?

I can say that our group ships about 2 million mt per annum of steel products and steel raw materials.

What is your general sentiment regarding the outlook for the market? As the current finished steel markets are weak in general, what is your expectation regarding the future?

I think the overall sentiment as regards rebar is bearish and prices are tending to decrease in general. We are unlikely to see a reversal of this trend whilst offers exceed bids.

Do you expect scrap to exert pressure on the finished steel markets in the near future? Do you think the downtrend in scrap will continue? There has also been the issue of tight supply of scrap globally. Which scenario do you think is most likely in the long run?

Presently the finished product price seems to be driving the raw materials price. Once again, there is too much speculation. Technically, assuming global positive growth at some stage, scrap supply is insufficient, and so the trend must reverse.

What do you think about the current situation in the Gulf? Normally, Gulf countries are net finished steel importers. Do you see any demand reviving in that region soon?

There is demand - the market is still about 300,000 mt per month - which makes it still one of the biggest globally. However, ‘if' all the local producers were producing at full capacity (they are not), there would be sufficient domestic production and no need for imports; furthermore, there are two new producers due to come on stream in the coming months and so, mathematically, the UAE will be a net rebar exporter in the future.

How do you see China's presence in the global finished steel markets with the absence of such demand from the Gulf?

I don't see China in the rebar market in general at these price levels, but they are already in the wire rod market.

Which markets do you think will shine as potential buyers?

The demand is known and relatively constant; markets will shine at different times depending on inventory levels and, to some extent, price. If there is no cutback in rebar production in the major producing countries, it seems there is not much chance of a price rebound until the recession is properly over, and currently it seems that the recession is not over. This issue of rebar production cuts is not a new one. It has been discussed for over a year, but it seems no-one is taking it seriously.

This is the 61th IREPAS Meeting and we are in Dubai. What is your impression of the event and what kind of a role do you think IREPAS should undertake in the future?

IREPAS is not what it was 60 meetings back: it has improved. The major ‘plus' for traders is the opportunity to meet so many buyers and suppliers in one place. The mystery and intrigue is fun.

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