In the last session of the SteelOrbis Spring '11 Conference & 64rd IREPAS Meeting, held in Hong Kong on April 10-12, long product and
billet suppliers and producers, as well as traders and raw material suppliers, shared the conclusions reached at their special committee meetings regarding the current situation in the markets with the general participants at the event.
Yusuf Guven (Helveco Intertrade), the chairman of the raw materials committee, told attendees that the committee agreed that ex-Black Sea
scrap availability is becoming tighter, with not much
scrap left unsold, while, regarding
scrap from continental
Europe, there is greater availability for HMS I/II 70:30 and higher grades of
scrap, mainly due to the strong euro. The raw materials committee chairman said that the
US scrap market is generally firm and prices are foreseen to move upwards in the coming period.
Scrap prices have softened somewhat at the moment, he added, since the winter has ended and
scrap availability is higher as compared to the past two months. However,
scrap prices are expected to firm up again by the end of this month since inventories are low.
Michael Setterdahl (Nucor
Trading), the chairman of the traders' committee, stated that three main issues that characterized the first quarter of the current year were the short-term impact of the Japanese earthquake, the unclear situation in the
Middle East and
North Africa (MENA) region and rumors regarding
China's possible cancellation of export tax rebates. Traders agreed that business in
Japan, particularly demand for construction steel will increase, due to the anticipated reconstruction of the earthquake-hit region. Regarding the risk of radioactive Japanese
scrap exports, Mr. Setterdahl said that they are not expecting any significant impact from this issue, since there are already reports saying that South
Korea has recently accepted ex-
Japan scrap shipments.
Japan is also foreseen to supply its steel needs domestically. Regarding the MENA region, the chairman of the traders' committee said that the Algerian and Tunisian markets are performing better now and that, once political unrest in the region calms down, the regional governments will focus on stabilization and on new investments. As regards Chinese steel exports, traders agreed that
China's share in its two major export markets, South
Korea and India, is shrinking, due to increased steel production in these markets, and that it will be difficult for
China to find new markets.
Mohammad Al-Saadi (
Qatar Steel), the chairman of the
rebar and
wire rod suppliers' committee, said that
wire rod and
rebar demand in
Europe is down, which is reflected in the low capacity utilization levels in Spain and in Italy. However, Mr. Al-Saadi said that the committee foresees that demand will see an uptick in the current year. Demand in the Caribbean is better than in 2010, and the same goes for North and
South America, Mr. Al-Saadi said, adding, "...demand in Asia is ok and
Japan is expected to recover very soon." As regards the MENA region, the
rebar and
wire rod suppliers' committee agreed that although currently demand has contracted to some extent, once problems are solved, investments are expected to increase in the region. Saudi Arabia,
Qatar and
Kuwait are expected to witness continuous intensive infrastructure spending in the next five to seven years. Finally, Mr. Saadi told the attendees that the situation will be much better starting in a few weeks' time, and the second half of this year is expected to be better than the first one.
Uğur Dalbeler (Colakoglu Metalurji), IREPAS chairman and also chairman of the
billet suppliers and producers' committee, said that in the three main steel
billet supplier markets, namely
Ukraine,
Russia and
Turkey, tonnages available for exports have declined, due to increased domestic consumption in the domestic markets in
Russia and
Ukraine. The previously observed firmness of Caspian demand has softened lately and the availability of ex-Black Sea steel
scrap is expected to regress in the coming period. As regards
Turkey's steel
billet exports, Mr. Dalbeler reminded his listeners that last year
Turkey increased its steel
billet exports due to firmer demand, reducing its
rebar exports. However, so far in 2011
Turkey's steel
billet exports have declined again, in favor of
rebar exports. Steel
billet supply from all these three regions will continue to decrease, Mr. Dalbeler concluded.