UK based MEPS said that in China, average provincial billet transaction values were stable in December. Bearish dealers are forecasting buying activity and selling figures to weaken next month, due to the proximity of the Gregorian calendar New Year and Chinese New Year festival. Most have reacted cautiously to the central bank's decision to reduce the deposit ratio of commercial banks. Questions have been raised on whether it is sufficient to revitalize demand for finished steel and advance transaction values.
Indian market sentiment has continued to be unsettled by the deteriorating domestic economic climate and the depreciation of the rupee. The latter has inflated the cost of imported raw materials. Primary steelmakers’ nominal selling figures were unchanged, whilst offers circulated by secondary producers continued to shadow the cost of steelmaking ingredients, particularly, sponge iron, pencil ingots and ferrous scrap.
CIS steelmakers are cautiously optimistic about the outlook for the first quarter of 2012. The majority maintained billet utilization rates the month at November’s levels. The trading climate has remained subdued in key export markets, particularly the MENA region. Quotations to Asian clients were raised to account for currency fluctuations and the higher cost of steelmaking ingredients, particularly, ferrous scrap.
Difficult trading conditions persist in Turkey. Domestic steelmakers issued higher quotations in week 49, to justify for currency fluctuations and a rebound in imported ferrous scrap offers. MEPS sources contend that the upward adjustment is unsustainable as it was not supported by real demand. Shipments to Middle Eastern clients have fallen short of market projections. In general, foreign buyers plan to wait for evidence of price stability. This region has been unsettled by strong price competition from CIS suppliers.
The Iranian billet market has entered a period of low demand. Importers are not interested in foreign offers. Buying activity is forecast to improve after the end of Muharram.
Meanwhile, MEPS sources report that both rerollers and merchants need to replenish depleted stock levels. CIS material is subject to a 4% import duty.
(Source MEPS - Semi-Finished Steel and Ferrous Scrap Review)
