On October 19 at the SteelOrbis Fall 09 Conference & 61st IREPAS Meeting held in Dubai, the Traders' Committee, chaired by Wilhelm Alff, long products sales director Stemcor Europe AG, and including Butch Zeederberg from Liberty Commodities Ltd, F.D. Baysal from Seba International Inc. and Bernd Neuenkirchen from Coutinho & Ferrostaal Inc., expressed its views on the current situation in the long steel markets and on the challenges that market players may face in the coming year.
Mr. Alff stated that rebar production in the EU-15 countries stood at 10.4 million mt, down 25 percent year on year, while rebar consumption stood at 8.8 million mt, a drop of 27 percent year on year. Meanwhile, Turkish rebar imports to the EU-15 countries registered a downtrend in Q1 2009, of approximately 73 percent year on year.
Regarding the current situation, the committee chairman touched on several issues and possible scenarios. Inventories should be kept low, he said, and there may be a concentration on local suppliers in the coming year. Mr. Alff also stated that we may see strategic alliances in the coming year. Another question to be answered regarding next year - will production follow the decline in demand if there is a further decline in consumption? (The question is asked regarding the EU in this case but is also valid for the global markets). Another problem facing everyone, producers and suppliers, is the issue of strong price volatility. It is really hard to survive in a market characterized by such price volatility and so price hedging may be an option to counter this.
F.D. Baysal stated that there is only one solution in order to ensure the recovery of the market: production capacities would have to be cut. Butch Zeederberg, on the other hand, emphasized the importance of the UAE's role and also said that everyone would have to keep a close eye on China. In a quick survey of the audience at the committee meeting in response to the question of whether price levels would be at lower levels, unchanged, or at higher levels in the first quarter of 2010, most of those present indicated that prices levels would likely indicate an uptrend in the first quarter.
The Traders' Committee session concluded with the prediction that some moderate improvement in price levels and demand may be seen next February due to seasonal factors.