Turkish long product quotations have once again been heavily influenced by the movement in semi-finished steel and scrap values. Export prices have also been raised to accommodate the change. Shortages have continued to plague the flat products market. Material is currently being traded in excess of Erdemir's new set of basis prices. The mill is still not accepting new orders. Local traders are not expecting steel values to fall in the immediate future.
The rebound in international steel prices is now being felt in the UAE market. Local steel merchants and end-users have been preparing themselves for the holy month of Ramadan. Traditionally, the run-up to this religious festival is marked by a period of low trading activity. Despite this, the cost of imported material has climbed this month. Local rebar producers have held their values but may review them if the asking price of imported billet and scrap continues to rise.
In the first half of 2009, the outlook for the Indian steel market was uncertain. Sentiment amongst flat product steelmakers started to turn bullish in June. Since then, domestic offers for flat rolled material have started to increase. The effective prices of long products have been under pressure from the onset of the monsoon season and a faltering construction sector. In August, leading steel producers reduced their basis prices for construction steel products by between Rs500 and Rs2,000 per tonne ex-works. In contrast, flat product basis offers were either left unchanged or raised by Rs800/2,000 per tonne ex-works.
Trading conditions in South Africa have been dampened by weak economic fundamentals. Underlying demand is still poor, despite the government's stimulus plan. Manufacturing has been hit hard by the country's first recession in 17 years. Merchants are hopeful that this month's reduction in the main lending rate to 7 percent will kick-start demand. It is more than likely that further cuts by the South African Reserve Bank will be required.
Evidence is growing that the Brazilian steel market has begun to recover. Prices have remained stable and the month-on-month incremental improvement in real demand has continued. Import duties and higher international figures have made local producers more bullish. A few have altered their output to mirror the new market conditions. Domestic and export prices are now expected to be raised next month.
Russian steelmakers have continued to increase their utilisation rates in response to an upturn in local demand. A few facilities are now operating at full capacity. Domestic values are tending to mimick the movements in billet and scrap markets. The situation in the Ukraine is more or less static. At the end of July, twenty-five steelmaking units out of sixty-five were standing idle, which is four units less than in June. The recovery in Ukrainian steel prices is expected to be slow and protracted.
The market is still very quiet in Mexico. Buyers are scarce. The low trading activity has forced local steel producers to review their pricing mechanism. Manufacturers have been particularly exposed to the fall in US consumer spending. Sentiment is still mixed. Steelmakers have sought to lift their selling values but have faced buyer resistance. Merchants are unsure whether or not their customers will accept the latest adjustments. Construction usage has improved of late but demand is still price sensitive.