Misery deepens with each passing week in flat product market .Despite the export levels touching the lowest value since November 2010 agony remains excruciating. With most of the flat product market virtually shut out reeling under worst economic crisis only prophesies can rule the roost.
European and the Indian Sub continent grappling with poor demand and stifling competition from Chinese mills undercutting seemed to at the fore. Ukrainian and Russian mills left with superfluous volumes as the European buying was skeletal were facing spirited Chinese challenge in their own backwaters.
At the same time Indian mills have been coerced to set their eyes on overseas waters with renewed vigour after nearly 20% devaluation of INR v/s USD. At the same time the sluggish domestic demand coupled with ameliorated capacity have provided spurs to export.
SE Asian market has been saddled with its own share of misery as Japanese Tsunami and Thai floods have not only crippled economy growth but have failed to generate demand from reconstruction owing to inherent economic handicaps. Korea bulging with hiked production has stopped being export destination for Chinese mills.
In fact the damage has been so crippling that Korean and Japanese mills have relapsed repeatedly after attempting grandiose hike in Q3 and Q4 in HRC prices.
It is learnt that Korean, Chinese and Japanese mills are fighting neck to neck in the Middle Eastern and European market to have a slice. India of course has been favorite destination for value added HRC and CRC but the rapid appreciation in USD over INR has made buyers import shy.
Finished flats market faces conflicting trends and sentiments. The Ukrainian HRC is around USD 550 per tonne to USD 560 per tonne FOB Odessa (down to USD 540 per tonne in Mariupol) with lack of confidence in for future price trends. The Russian material from Novorossiysk is heard to be around USD 570 per tonne to USD 580 per tonne with rumored increase of offers for January to USD 600 per tonne to USD 610 per tonne FOB.
Even though the prices have touched unexpected lows there seems no light down the tunnel as the year draws to a close. However there is anticipation of enhanced buying and for stock replenishment in Europe and Middle East after the New Year vacation.
Since buying has been nearly absent in Europe for the past 6 months and Middle East has barely seen any semblance of buying in a year it might just be time for better turn of event in 2012.
A lot will depend on the definitive resolution of the EU crisis which will enliven the proceedings. With the EU economic war horses Germany and France making breathe taking attempts at resurrection lest they become victims of the debt quicksand trace revival may be in store.
It is learn that some of the European mills have already hiked the HRC prices by EUR 10 per tonne to EUR 20 per tonne for January booking.
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