Traders at IREPAS: Situation is not as pessimistic as it seems

Monday, 26 September 2011 16:54:59 (GMT+3)   |  
       

Sharing their opinions on the markets at the Traders Committee during the SteelOrbis 2011 Fall Conference & 65th IREPAS Meeting held in St. Petersburg on September 25-27, representatives of major trading companies, including Dr. Siegfried Purrer from F.J. Elsner Trading GmbH, Bernd Neuenkirchen from Coutinho & Ferrostaal Inc., Wilhelm Alff from Stemcor AG, Michael Setterdahl from Nucor Trading SA and F.D. Baysal from Seba International, said that the situation in the steel market is not as pessimistic as is generally reported.

Regarding the US market, Mr. Neuenkirchen stated that long steel demand from the construction market is still depressed. However, Mr. Baysal said that US President Obama's recently-announced American Jobs Act, which proposes to spend $105 billion on public works projects, mostly on steel-related projects, is of a different nature from the incentive spending announced after the global economic crisis in 2008, which was used generally to inject money into financial institutions; this time the funds are expected to penetrate directly and rapidly into the market. "So the outlook for steel in the short term in the US has got its medicine, until the next presidential elections," said Mr. Baysal.

The South American market, particularly Brazil, is witnessing lively demand, and local production in the region is also increasing to meet this demand.

On the other hand, in Europe, domestic long steel demand and consumption are still significantly low. However, due to the recent weakness of the euro against the US dollar, European long steel suppliers are becoming more aggressive in export markets such as Italy and Spain. And even Greece, which is in deep crisis, is looking for opportunities in export markets, said Mr. Alff. Nevertheless, the future trends of the euro are still unpredictable, along with situation in the steel market, he added. Dr. Purrer, on the other hand, emphasized that the financial markets are not reflecting the situation in the steel market, where a certain amount of demand is still being observed. However, the lack of confidence between financial institutions, particularly banks, is posing difficulties for trading. Mr. Setterdahl added that the rise of the US dollar is exerting downward pressure generally on prices.

As for the Middle East and North Africa, Mohammad Ahmad Al-Saadi from Al Watania Steel said that the steel market situation is positive in general. According to Mr. Al-Saadi, the Egyptian and Tunisian markets have settled after the political changes seen in these countries, and demand is expected to improve in the region in the long run, on the back of reconstruction projects. For the UAE, Mr. Al-Saadi said that no improvement in demand is expected in the next three to five years, since current buildings are more than enough. However, other markets, such as Saudi Arabia, Qatar and Bahrain, are showing improvement.

Traders said that scrap prices in 2011 followed a relatively stable trend, staying firm according to Mr. Alff, adding that the high scrap prices in Europe do not reflect the depressed European economy, since Europe is no longer a leader in scrap consumption and the market there just accepts the international levels. In the meantime, Mr. Setterdahl said that the traditional scrap price trends based on seasonal factors are changing, since world scrap consumption is rising, turning into a classic supply-demand situation. Mr. Baysal said that the big three iron ore producers dominating the market are following scrap price trends, as scrap pricing is determined more globally.


Similar articles

Pakistani buyers delay new scrap bookings as mood in finished steel segment falters

06 Mar | Scrap & Raw Materials

Turkey’s deep sea scrap market set to show clearer trend next week

01 Feb | Scrap & Raw Materials

Import scrap prices in Pakistan expected to rise further, demand not supportive

10 Jan | Scrap & Raw Materials

Taiwan’s import scrap market softens further despite positive rebar sales situation

05 Jan | Scrap & Raw Materials

Import scrap trade remains muted in Pakistan, prices mainly unchanged

03 Jan | Scrap & Raw Materials

Taiwan’s import scrap market softens as rebar trading slows down

29 Dec | Scrap & Raw Materials

Australia’s Green Steel of WA to build green steel recycling mill

28 Dec | Steel News

Import scrap activity in Pakistan muted due to European sellers’ absence, Red Sea crisis

27 Dec | Scrap & Raw Materials

SteelOrbis year-end review: Turkish steel industry experiences an even more difficult year in 2023

25 Dec | Steel News

Import scrap prices in Pakistan mainly stable in occasional deals, though sellers try to go higher

22 Nov | Scrap & Raw Materials