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Meps: Price growth remains limited in developing steel markets

- By Charlotte Stubben

Steelmakers in the emerging nations found it more difficult than their Western counterparts to implement steel price hikes in February according to a recent report published by MEPS.

Low seasonal demand
Low seasonal demand has occurred earlier than expected in Brazil. Domestic steelmakers have continued to employ moderate pricing policies. There are still concerns that the strength of the country’s national currency will reinvigorate import activity.

Price sentiment in Mexico has continued to be undermined by economic uncertainty and currency fluctuations against the US dollar. Distributors issued lower transaction values to free working capital and minimise potential losses.

Russian steelmakers
Weak market fundamentals have restricted the ability of Russian steelmakers to pursue price growth. Difficult trading conditions persist in Ukraine. The situation has been further aggravated by the financing problems surrounding Euro 2012 projects.

End-user demand fragile in China
Indian distributors contend that domestic steel products are overvalued. SAIL lifted its long products offers by up to 4 percent this month. The appreciation of the rupee against the US dollar has fuelled the prospect of import activity. End-user demand in China continues to be fragile, due to the country’s tight credit conditions and weak construction activity. There was no significant uptick in steel consumption in the post-Lunar New Year period.

A less transparent outlook
Market sentiment in Turkey has not improved. Local steelmakers have pressed ahead with price increases, despite finding it difficult to fill order books. Domestic consumption has fallen short of industry projections. The outlook for the United Arab Emirates’ steel market is now less transparent.

Distributors intend to persevere with conservative inventory levels, following the recent volatility in import quotations and the uncertainty surrounding state funded construction and infrastructure projects. The South African market has continued to be unsettled by material shortages. Stockists are monitoring the domestic-import price differential.

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