Steel Business Briefing
23-02-2012
South European section and merchant bar prices soften
Prices for merchant bar and sections in southern Europe have softened slightly this week by €5/tonne on weak demand, Steel Business Briefing learns from market sources.
According to producers and buyers in Italy and in Spain, transaction prices for category 1 sections for March delivery are €625-635/t ($828-842/t) delivered in Spain and €600-605/t ex-works in Italy.
22-02-2012
Sun Metals revives Omani steelworks project
Omani investor Sun Metals is set to revive a 600,000 tones/year steelworks project in Oman’s Sur industrial estate, 180km south of Muscat, with construction scheduled to begin by the end of this year, a Sun Metals director tells Steel Business Briefing.
The company, owned by Dubai-based Adiva Corporation, is carrying out the $90m investment in partnership with Muscat-based construction equipment provider Al Fairuz Trading & Contracting Co.
21-02-2012
Owner is one of Thamesteel’s main creditors
Al-Tuwairqi, the Saudi Arabia-based steel group that owns Thamesteel, the Kent-based longs producer, is among the UK mill’s main creditors, Steel Business Briefing learns from information from Companies House and sources familiar with the matter.
Al-Tuwairqi concluded an intra-group loan to Thamesteel for £33 million ($52m) on 17 December; the steelmaker entered administration on 26 January. As one of the group’s main creditors, Al-Tuwairqi will be able to participate in any creditors’ conference.
20-02-2012
US, Turkish & Indian scrap prices turn & move upwards - TSI
The latest weekly scrap reference prices released by The Steel Index (TSI) last Friday show that the weekly prices for US domestic scrap, Turkish and Indian imported scrap all turned and moved upwards from a week earlier, after four weeks of continuous declines. However, Turkish and US prices remain sharply lower than four weeks ago.
In the US, the weekly domestic shredded obsolete scrap reference price increased by 0.9% to $443/long ton delivered US Midwest mill as transaction data showed that higher prices were achieved. Exports from both coasts also picked up. This reference price is 5.5% or $26/long ton below the level of four weeks ago.
17-02-2012
Gerdau's 2011 profit slides 15% despite record sales
Brazilian steelmaker Gerdau posted a 15% year-on-year drop in net profit to R$2.1bn (US$1.22bn) in 2011, citing the gap between raw material costs and the ability to recover such expenses with sales, Steel Business Briefing learns.
In the final quarter, net profit reached R$472m (US$273m), up 12% over the identical period of 2010, the firm revealed Thursday
16-02-2012
Preview of Today's Top Article
Mechel temporarily idles two Romanian longs mills on weather
Mechel has suspended production at its Campia Turzii and Ductil Steel Buzau plants in Romania due to snow blocking raw material deliveries, the company tells Steel Business Briefing in a release.
15-02-2012
Majority of US companies surveyed expect lower prices - TSI
More than half of companies in the US surveyed are now expecting lower prices in the next three months, according to the latest carbon steel market results from The Steel Index (TSI) released this week. Price sentiment has also weakened in Europe.
However, half of US companies foresee better demand in the next three months, and more European companies also expecting higher off take.

14-02-2012
Small rises in European flats prices; US coils falling - TSI
The latest reference prices released by The Steel Index (TSI) show that almost all European coil, plate and rebar prices have moved slightly upwards. All US coil prices decreased, while plate also fell since last week.
In northern Europe, the average of daily HR coil reference prices was €8/ton above last week’s average. HD Galvanized coil was 0.5% higher at €624/t ($823/t). Northern European plate reference price ex-works is €7/t higher. Average lead-time for CR coils is unchanged from last week at 7.7 weeks.

13-02-2012
SBB Special Report: Iran seeks alternative steel imports
Iranian billet imports have decreased as a result of economic sanctions and banking restrictions, an Iranian trader tells Steel Business Briefing. The devaluation of the Iranian rial has also proved a serious challenge for the steel industry since December.
According to Iranian customs statistics, billet imports totalled 2.88 million tonnes in the first ten months of the current Iranian year (21 March 2011 to 21 January 2012), a fall of about 36% on the corresponding period of the previous year.

10-02-2012
Tata Steel Europe expects improved margins after Q4 losses
Tata Steel expects to see stable steel demand in Europe, while strengthening prices and restocking may improve margins in the coming quarter, Steel Business Briefing learns from the company’s quarterly results.
“Tata Steel was one of the first steel companies in Europe last year to start adjusting its output and configuration to the slowdown in the recovery,” Karl-Ulrich Koehler, Tata Steel Europe’s ceo, explains. In addition to the temporary idling of one UK blast furnace earlier in 2011, the company in December mothballed its Welsh Llanwern hot strip mill to meet low demand in the market.

09-02-2012
UAE rail network construction boosts steel demand
Construction of the first stage of the United Arab Emirates’ new railway network is underway. The stretch of line, measuring 266km, received government funding in December and will require a substantial tonnage of rails and other steel products.
Etihad Rail, developer of the $11bn project which is initially set to be utilised for freight transport and later passenger trains, plans to extend the network to link the UAE with Saudi Arabia in the west and Oman in the east at a total length of 1,200km. It will eventually be linked with the steel-handling Khalifa and Jebel Ali shipping ports, near Abu Dhabi and Dubai respectively, and is expected for completion in 2017.

08-02-2012
Saudi rebar suppliers offer discounts on lower import prices
Saudi Arabian rebar demand remains strong, buoyed by government-funded construction projects (see separate article). But increased imports of rebar from Turkey at lowered prices in January have led some Saudi suppliers to offer discounts, market participants tell Steel Business Briefing.
Although Saudi Arabian rebar prices officially remain fixed by the government at SAR 2,900/tonne ($773/t), various private-sector re-rollers and traders have been known to lower their prices on occasion in order to encourage buying; however, this is done mainly to established customers and is never officially announced.

07-02-2012
European HR coil prices keep rising; other flats steady: TSI
The latest reference prices released by The Steel Index (TSI) show that both European HR coil reference prices have increased since the previous week. US HR coil price was unchanged while other coil prices were more stable after recent gains. European rebar prices have also risen.
In northern Europe, the average of daily HR coil reference prices was €11/tonne above last week’s average. CR coil price consolidated, but HD Galvanized reference price was just higher at €621/tonne ($816/t). Average lead-time for HR coils is longer at 6 weeks. Northern European plate reference price is also slightly firmer at €623/t ($819/t).

06-02-2012
Bahrain's SULB plans capacity expansion and new rebar mill
Prospective Bahraini steelmaker United Steel Company (SULB) plans to increase its melting and direct reduced iron capacity, as well as install a rebar mill in the second phase of expansion at its new steelworks in the north-eastern region of Al Hidd.
Currently under construction, the works comprises a 1.5 million tonnes/year capacity DRI plant, 1m t/y melt shop and 600,000 t/y heavy sections mill that will produce medium-to-large H-beams. SULB expects to begin hot commissioning of the melt shop in September, while the DRI plant should come online in January 2013.

03-02-2012
CIS billet exports liven up as traders get booking
After a week of very low activity in the CIS billet export market, deals are being concluded at prices in the lower range of recent offers - equivalent to $560-565/t fob Black Sea, Steel Business Briefing learns from the market sources. A 30,000t mixed Ukrainian and Russian origin consignment of March lad-readiness have changed hands at $585/t cfr Turkey, yesterday, sources say.
Another, Ukrainian consignment of 60,000t, was sold to Egypt at a currently "unworkable" level of $610/t cfr and to Saudi Arabia at $620/t cfr, by the trader with "considerable freight advantages," SBB is told.

02-02-2012
Brazil's CSN buys German section mill for €482.5m
Brazilian steelmaker CSN has bought the German structurals mill Stahlwerk Thüringen (SWT) from Spain's Alfonso Gallardo group in a €482.5m ($632m) deal, CSN tells Steel Business Briefing.
The sale includes the 1.1m tonnes/year Unterwellenborn-based steelworks and its sales and distribution arm Gallardo Sections. The deal would reduce company debt by €485m and secure the future of the group, Gallardo said.

01-02-2012
Saudi Arabian rebar trade strong but prices still fixed
Saudi Arabian rebar prices remain fixed at SAR 2,900/tonne ($773/t) despite there being healthy sentiment in the market. Demand for the product is strong owing to government-funded projects and fresh private sector construction activity.
A trader believes producers will try to increase prices, which have been fixed since April 2010, as global prices are moving. However, the government has to approve any changes in rebar prices before they take place, he informs Steel Business Briefing. Turkey offered some rebar at $685-690/tonne cfr Saudi Arabia last week, while billet offers stand at $590-600/t cfr from CIS sources, SBB learns.

31-01-2012
Large gains in European coil prices; US levels falter - TSI
The latest reference prices released by The Steel Index (TSI) show that all European coil, plate and rebar reference prices have moved up, with coils showing the biggest rises. Some US coil prices eased, while plate was stable.
In northern Europe, the average of daily HR coil reference prices was €10/tonne above last week’s average. CR coil price rose sharply while HDGalvanised coil was 2.7% higher at €618/t ($807/t). Northern European plate reference price ex-works is €7/t higher. Average lead-time for CR coils is shorter.

30-01-2012
CIS billet availability will increase if Iran can't buy
The availability of billet out of the Black Sea from CIS producers may increase considerably in the next several weeks, as Iran’s ability to trade is curbed further by the lack of foreign currency reserves and intensifying sanctions, market sources tell Steel Business Briefing.
Whilst some producer-linked sources say the situation hasn't changed in the last few weeks, the majority of traders and producers selling to Iran say it is getting worse. "No new deals are being made – sellers are finalising the old deals," one trader says.

27-01-2012
Oversupply and weak construction hit Lebanese rebar market
Rebar trade in Lebanon has been hit by both falling product prices and winter weather conditions that are hampering construction activity. Large tonnages of product are expected for imminent delivery from the CIS that will cause oversupply in the local market, participants tell Steel Business Briefing.
Because of this availability, buyers have the upper hand with suppliers eager to get rid of stock. Transactions taking place are for small tonnages only, for immediate requirement; as buyers anticipate rebar prices to fall further and postponing large orders.

26-01-2012
Administrators appointed at UK's Thamesteel
The UK bar and billet plant Thamesteel, controlled by the Saudi-based Al Tuwairqi group, is set to officially announce that it is entering into administration today (Thursday), Steel Business Briefing learns from sources within the company.
Mazars, the accountancy firm, has been appointed to administer the company, according to a source within Thamesteel. No decision has been taken on winding up the firm or attempting to restart production, SBB understands, and the process of looking to attract fresh investment into the company is likely to continue.

25-01-2012
Weakening Iranian rial hits re-rollers' semis imports
Steel prices in Iran could see further increases in the coming weeks. Over the last month, the value of the Iranian rial has plummeted 50% against the dollar at the unofficial exchange rate, which many importers are currently obliged to use. Steel product prices have simultaneously risen 24-28%, a member of the Iranian steel distributors’ association tells Steel Business Briefing.

Although there are relatively few orders from end users at present, the high cost of energy and importing semi-finished products has increased production costs - if there is any increase in end user demand, steel prices will rise sharply, the distributor says

24-01-2012
S European HR coil price up sharply; US flats firm - TSI
The latest reference prices released by The Steel Index (TSI) show that its southern European HR and HDGalvanised coil prices have increased sharply since the previous week. US and northern European coil prices are generally firm, while European rebar prices have also gained.

The average of daily HR coil reference prices ex-works in southern Europe is €10/t above last week’s average at €497/t ($637/t), while HDG coil price ex-works increased by 1.6% or €9/t. Average lead-times for all coils are shorter. Southern European plate price ex-works is €2/t lower.

23-01-2012
Turkish, US & Indian scrap reference prices all slip - TSI
The latest weekly scrap reference prices released by The Steel Index (TSI) last Friday show that the weekly prices for US domestic scrap, Turkish and Indian imported scrap all slipped from a week earlier. However, these prices remain higher than four weeks ago.

In the US, the weekly domestic shredded obsolete scrap reference price decreased 0.8% to $469/long ton delivered US Midwest mill. There were strong transaction volumes, while good in-flows have continued owing to the mild weather. This reference price is 3.5% or $16/long ton above the level of four weeks ago.

20-01-2012
German rebar, mesh quality wire rod rise
Demand and prices for rebar have picked up across Germany due to mild winter weather so that construction projects are continuing to place orders, Steel Business Briefing learns from market sources.

Some market participants say prices for rebar have already risen and are in the market for around €580/tonne ($750/t) delivered. One German producer says material is still available for around €550/t ex-works for rebar. However, he says prices will increase by €20-30/t effective from the beginning of next month.

19-01-2012
Bahraini rebar mill ramps up output to meet local demand
Bahrain’s only rebar rolling mill, Universal Rolling (Unirol), intends to meet the majority of domestic demand for the product in 2012, after ramping up production last year, a company representative tells Steel Business Briefing. Bahraini rebar consumption is expected to total 250,000 tonnes this year.

The bulk of steel consumption in the Gulf state is currently met by imports from Qatar Steel and Emirates Steel, with bookings from Turkey no longer viable as Turkish sellers require local buyers to order minimum tonnages of 10,000 tonnes, a local trader says.

18-01-2012
Demand muted in largest Turkish MENA rebar export markets
Turkey’s largest seaborne Middle East and North Africa rebar export markets, UAE and Egypt, are unlikely to contribute heavily to fresh bookings in the coming weeks owing to lack of demand, market participants tell Steel Business Briefing.

While January deliveries to the UAE from Turkey amounted to only one large cargo, three mills are understood to be sending shipments due to arrive in February, a Dubai importer says. “The most recent bulk booking was made at $680/tonne cfr Dubai [theoretical weight basis] last week,” the importer says, adding: “This means three vessels will arrive next month”.

17-01-2012
SBB Special Report: Bahrain cautious over demand outlook
Construction activity in Bahrain is expected to pick up this year after it was disrupted in 2011 owing to social unrest. Private sector projects remain slow to get off the ground, but state-funded housing and infrastructure work should drive consumption of rebar and other steel products; however, local sources tell Steel Business Briefing they’re tempering their optimism.

Bahrain, although not destabilized to the same extent by social unrest as other countries in the Middle East and North Africa, was impacted by protests in 2011, which made it difficult to transport construction material by road. This slowed the implementation of construction projects and resulted in decreased demand for steel, a rebar supplier says.

16-01-2012
 US scrap rises sharply; Turkish & Indian levels also up: TSI
The latest weekly scrap reference prices released by The Steel Index (TSI) last Friday show that the weekly price for US domestic scrap rose sharply from a week earlier. Turkish and Indian import scrap reference prices also increased.

In the US, the weekly domestic shredded obsolete scrap reference price increased by almost 3% to $473/long ton, delivered US Midwest mill, with good volumes across all grades. PMI reports and an improving steel market have contributed, despite good material in-flows due to the mild winter weather. This reference price is 4.6% or $21/long ton above the level of four weeks ago.

13-01-2012
 Brazil's Gerdau hikes domestic longs prices by 5-7%
Leading Brazilian longs maker Gerdau is implementing a 5-7% price hike on domestic products for certain customers, particularly those in the construction sector, market sources tell Steel Business Briefing.

Observers say the global environment is supportive of this price increase, citing the recent US$50 jump in Turkish rebar prices to US$680/t, rising scrap prices and increasing demand.

12-01-2012
Thai bar/rod market slow to recover after floods
The Thai steel market is still sluggish despite the normalisation of business activities after severe flooding hit Bangkok and many other parts of the country last quarter.

“The market is less active than expected and this could be due to the approaching lunar new year holiday (commencing 23 January),” a Thai trader tells Steel Business Briefing. The weakened Thai baht against the dollar has also reduced import buying interest.

11-01-2012
Syrian tariff leads to diminished steel imports from Turkey
Long-rolled steelmakers and traders in Turkey will have to make up a shortfall of some 303,332 tonnes of exports this year as the country’s 11th-largest steel export partner, Syria, is out of the market indefinitely due to an increased import tariff, market participants tell Steel Business Briefing.

10-01-2012
All European & US coil reference prices increase - TSI
The latest reference prices released by The Steel Index (TSI) show that all its northern and southern European and US coil reference prices have increased further since the previous week. Southern European plate and rebar prices also gained slightly.

The US HR coil reference price FOB Midwest mill gained 2% to $721/short ton ($795/tonne). CR coil reference price gained $5/st, while HD Galvanized coil price also rose more sharply. The average delivery lead-times for HR coils are longer, at 6.1 weeks. US plate reference price FOB Midwest mill was almost 1% higher at $942/st ($1038/t).

09-01-2012
 Weekly scrap prices rose slightly in a quiet week - TSI
The latest weekly scrap reference prices released by The Steel Index (TSI) last Friday show that prices for Turkish and Indian imports and US domestic scrap all rose between 0.6-1.5% in the first week of the new year from a week earlier.

In the US, the weekly domestic shredded obsolete scrap reference price rose by $7/long ton to $460/lt. Demand from mills increased as their steel market continued to strengthen. This reference price is 3.6% or $16/lt above the level of four weeks ago.

06-01-2012
 Saudi Arabian rebar demand increases, prices may move soon
Demand for rebar in Saudi Arabia had slowed down towards the end of 2011, but Steel Business Briefing is informed by traders and producers that demand is expected to increase in the coming months as the Saudi government announced quite a high budget for 2012 that includes many steel-consuming construction projects like infrastructure, new universities and roads.

Rebar prices have been fixed at SAR 2,900/tonne ($773/t) since April 2010 from Saudi Arabian producers. But local sources believe prices will change this quarter, noting that this depends on global price trends.

05-01-2012
Price forecasts slip globally; demand outlook steady - TSI
Fewer companies in North America, Europe and Asia are expecting higher prices in the next three months, according to the latest carbon steel market survey results from The Steel Index (TSI), but more respondents foresee unchanged levels. The number of companies globally predicting higher demand is almost unchanged. More companies than last week in US report higher stock levels.

48% of respondents globally expect prices will increase, down from 58%, while 33% expect prices to be stable and 19% foresee lower prices. (See table.) The number of companies in Europe expecting higher prices fell to 53% from 60%, with 42% predicting stable prices, up from 20%, and 5% foreseeing lower prices. 56% of US companies expect higher prices, down from 72%, with 25% foreseeing stable prices.

04-01-2012
CIS billet traders see limited price rises this month
Since CIS commercial billet export prices reached concluded prices up to $605/tonne fob Black Sea at the end of last month, little has happened in terms of trade due to the extended festivities in Russia, the other CIS countries and Ukraine. Trade is expected to resume next week, sources tell Steel Business Briefing.

But despite the mills' relatively high degree of concluded bookings for January and in some cases February, and the obvious need to buy in the CIS traditional export markets, the first month of the year is not expected to be particularly exciting, they say. "Mills are certain to come out with $10-20/t increases, and some have already offered tentatively at $620/t fob Black Sea. A $5-10/t increase is possible, but prices are unlikely to rise any further in January," one trader says.


03-01-2012
Weekly scrap prices stable, but 4-weekly levels higher: TSI
The latest weekly scrap reference prices released by The Steel Index (TSI) last Friday show Turkish and Indian imports and US domestic scrap prices to be almost unchanged from a week earlier. However, all three gained 5.8-8% over four weeks.

The weekly average of daily Turkish scrap import reference prices slipped 0.4% from last week’s average to $460/tonne cfr Iskenderun. Short-sea and European material was preferred to US scrap, which was offered at higher levels. The weekly reference price is $35/t or 8% above the level published four weeks previously. TSI’s daily scrap reference price, published since 1 July, slipped to $459/t on Friday, a decrease of $1/t from a week before.