A crucial week for steel industry begins

A new week has begun for Asian markets, which is relatively an important one because of being the last week of April. Although trade never stops in steel markets, last weeks of the months are usually much busier, as all market players begin to determine their prices for the next month and plan their purchases, sales and production tasks. Steelmakers in Asia have already begun announcing price hikes. For example, Japanese steel maker Tokyo Steel, five steelmakers in North China, South Korean POSCO, Russian steelmakers Severstal-Metiz, Mechel and Severstal, and Ukrainian steelmakers Ilyich and Zaporizhstal are among the mills which announced price increases recently. Meanwhile, price increases in all steel markets have slowed down recently, following the sharp increases at the beginning of the month. The starving steel consumers have been fed up at least for the time being and most markets are calmer compared to the previous weeks. International iron ore talks have not reached a conclusion yet and everybody in Asia is keeping an eye on the talks. The parties may wait till the May Day holiday to announce the rate of the increase in ore prices in order to lessen its impact on Chinese steel industry. On the other hand, Indian iron miners proposed an idea of signing long-term ore supply contracts to Chinese steel industry, but failed to receive a positive response, at least for the time being. Scrap suppliers from the CIS countries are trying to increase their offer prices further but they generally fail to make deals at the proposed levels for Asian and Middle East markets. Spring is an important season not only for waking up the steel markets, but also for being the season when governments usually announce their new policies. Accordingly, the Chinese government is expected to announce a decrease in export tax rebate on finished steel goods and to impose a tax on billet exports beginning from May 1, or June 1. Last week, India changed its scrap import policy, which may lead to a decrease in its import volumes. The government also announced plans to amend the existing steel policy, especially in terms of iron ore export. Pakistan also announced the extension of the deadline regarding the imports of flat steel materials imported from India to be used in the reconstruction after earthquake. Steel trade in Asia may speed up again in the first weeks of May when the new policies become clearer and the markets accept the increases in ex-factory prices.