In China, trading volumes softened ahead of the country's week long national holiday. Local traders were reluctant to procure material, in view of the low seasonal demand for finished steel products. Most intend to hold conservative inventory levels in February 2012. Several billet producers opted to temporarily halt production as a result.

Price growth was noted in all five Indian states researched by MEPS (International) Limited. The upward momentum witnessed in January was fuelled primarily by input cost pressures, particularly, a shortage of iron ore, Coal India’s new pricing policy and more expensive US dollar denominated imported raw materials.

Buying activity in South East Asia softened ahead of the Lunar New Year festival. The week long holiday is observed in Malaysia, Singapore and Vietnam. Construction activity is likely to rebound in February 2012.

Billet shortages in Iran have fuelled a sharp rise in transaction values. Importers are unable to purchase material due to banking sanctions against the country and a tightening in domestic credit conditions. Bearish CIS exporters operating in Caspian Sea ports have begun to look for alternative markets for February's production campaign.

(Sourced from MEPS - Semi-Finished Steel Review)