In the last session of the SteelOrbis Spring '11 Conference & 64rd IREPAS Meeting, held in Hong Kong on April 10-12, long product and billet suppliers and producers, as well as traders and raw material suppliers, shared the conclusions reached at their special committee meetings regarding the current situation in the markets with the general participants at the event.
Yusuf Guven (Helveco Intertrade), the chairman of the raw materials committee, told attendees that the committee agreed that ex-Black Sea scrap availability is becoming tighter, with not much scrap left unsold, while, regarding scrap from continental Europe, there is greater availability for HMS I/II 70:30 and higher grades of scrap, mainly due to the strong euro. The raw materials committee chairman said that the US scrap market is generally firm and prices are foreseen to move upwards in the coming period. Scrap prices have softened somewhat at the moment, he added, since the winter has ended and scrap availability is higher as compared to the past two months. However, scrap prices are expected to firm up again by the end of this month since inventories are low.
Michael Setterdahl (Nucor Trading), the chairman of the traders' committee, stated that three main issues that characterized the first quarter of the current year were the short-term impact of the Japanese earthquake, the unclear situation in the Middle East and North Africa (MENA) region and rumors regarding China's possible cancellation of export tax rebates. Traders agreed that business in Japan, particularly demand for construction steel will increase, due to the anticipated reconstruction of the earthquake-hit region. Regarding the risk of radioactive Japanese scrap exports, Mr. Setterdahl said that they are not expecting any significant impact from this issue, since there are already reports saying that South Korea has recently accepted ex-Japan scrap shipments. Japan is also foreseen to supply its steel needs domestically. Regarding the MENA region, the chairman of the traders' committee said that the Algerian and Tunisian markets are performing better now and that, once political unrest in the region calms down, the regional governments will focus on stabilization and on new investments. As regards Chinese steel exports, traders agreed that China's share in its two major export markets, South Korea and India, is shrinking, due to increased steel production in these markets, and that it will be difficult for China to find new markets.
Mohammad Al-Saadi (Qatar Steel), the chairman of the rebar and wire rod suppliers' committee, said that wire rod and rebar demand in Europe is down, which is reflected in the low capacity utilization levels in Spain and in Italy. However, Mr. Al-Saadi said that the committee foresees that demand will see an uptick in the current year. Demand in the Caribbean is better than in 2010, and the same goes for North and South America, Mr. Al-Saadi said, adding, "...demand in Asia is ok and Japan is expected to recover very soon." As regards the MENA region, the rebar and wire rod suppliers' committee agreed that although currently demand has contracted to some extent, once problems are solved, investments are expected to increase in the region. Saudi Arabia, Qatar and Kuwait are expected to witness continuous intensive infrastructure spending in the next five to seven years. Finally, Mr. Saadi told the attendees that the situation will be much better starting in a few weeks' time, and the second half of this year is expected to be better than the first one.
Uğur Dalbeler (Colakoglu Metalurji), IREPAS chairman and also chairman of the billet suppliers and producers' committee, said that in the three main steel billet supplier markets, namely Ukraine, Russia and Turkey, tonnages available for exports have declined, due to increased domestic consumption in the domestic markets in Russia and Ukraine. The previously observed firmness of Caspian demand has softened lately and the availability of ex-Black Sea steel scrap is expected to regress in the coming period. As regards Turkey's steel billet exports, Mr. Dalbeler reminded his listeners that last year Turkey increased its steel billet exports due to firmer demand, reducing its rebar exports. However, so far in 2011 Turkey's steel billet exports have declined again, in favor of rebar exports. Steel billet supply from all these three regions will continue to decrease, Mr. Dalbeler concluded.