Challenging trading conditions persist, in Brazil. Buyers remain extremely cautious, due to numerous economic and political uncertainties. Mills have spare capacity, caused by a substantial reduction in orders from downstream industries. Price support from export demand is limited.
A steady market situation continues, in the Russian Federation. End-user groups are acquiring material only for their immediate needs. Profit margins at service centres are negligible, at present. Project completion is usually expedited before the onset of the winter months. Price support from export demand is minimal.
The downstream steel market is weak, in India. As a result, finished flat product demand and transaction values are under negative pressure. Delivery lead times from local mills are very short. MEPS’ research reveals that Indian stockists are forecasting that sales volumes will begin to improve from mid-October onwards. Demand from overseas customers is sluggish.
Market confidence is unchanged, in China. Service centres are employing “wait and see” procurement strategies. Inventories are slowly being absorbed. Production restrictions, are being implemented by steelmakers, operating in the provinces of Shaanxi, Shanxi, Gansu, Sichuan, Hunan, Hubei and Shandong. Meanwhile, the Minister of Ecology and Environment is putting pressure on the provincial governments to ensure that steel producers adhere to the emission targets.
Business sentiment is fragile, in Ukraine. Distributors are postponing forward procurement decisions, owing to tepid sales and tight cash flow. The majority of these firms are hoping that industrial demand will pick up, in the coming months. The local association of metal producers, Metallurgprom, reports that finished steel production, in July 2019, totalled 1.512 million tonnes – up 0.8 percent, month-on-month.
Price volatility is eroding market confidence, in Turkey. Local service centres and steel traders have questioned the sustainability of the current transaction values – citing that price support is limited, amid low enquiry rates. Domestic sales volumes are restrained, exacerbated by the instability of the Turkish lira against the US dollar and volatile import price quotations. Export opportunities are still restricted in the Middle East and North Africa regions.
The business climate, in the United Arab Emirates, is forecast to be stable, at best, in the next trading period. Buyers are purchasing cautiously as import prices continue to drift downwards. Construction activity is flat, with minimal signs of growth. Risk-averse traders plan to retain minimum inventory, in September. Export opportunities are restricted outside the GCC region.
Activity is subdued, in South Africa. Service centres are adamant that the domestic market will not absorb a further escalation in steel selling values. Despite the low trading volumes, the country’s main flat product supplier announced price increases, for September orders.
The business environment is slow in the Mexican steel market. Producers are struggling to impose a domestic price advance. Distributors and traders are sceptical regarding the prospect that buying activity will pick up, in September. The consensus view, from MEPS’ August research, is that the bottom of the current price cycle may soon be reached in the long product segments.