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India’s first budget under the leadership of recently elected prime minister Narendra Modi grabbed the headlines this week.
The plans announced by minister of finance, Arun Jaitley, with the aim of renewing growth in manufacturing and infrastructure, were generally seen as a positive step toward boosting steel demand.
Jaitley also committed to untangling the impasse in the mining sector, including iron ore mining.
But steelmakers expressed worries about plans to increase the customs duty on coking coal, and a potential rise in the rate of royalties for minerals.
They fear a possible increase in production costs that steel mills will have to absorb, since the country’s weak steel market provides little scope for rises in steel price.
There was not much joy in the automotive sector this week.
Brazil’s auto association, Anfavea, significantly lowered its production forecast for the country’s car industry for this year. Vehicle output is expected to decline by 10% and domestic car sales by 5.4% year-on-year, while exports are expected to drop by 29.1%.
New car sales in Russia are expected to fall by 12% this year, according to the Assn of European Businesses (AEB).
At the same time, the European head of carmaker Ford appealed to decision-makers in the EU to commit support for a more competitive automotive industry.
A notable exception to the above trends was Mexico. Here, car production rose by 7.4% in the first half of the year, benefiting from demand growth in the USA, according to the country’s automotive association, Amia.
China steel exports – where to next?
The rising number of trade actions being considered against Chinese exports raise questions about which trade routes will remain open, and what the effects on the market will be if certain destinations become cut off.
In response to possible US trade action, Chinese flat-steel exporters are beginning to lay the groundwork to service more customers in the Philippines, Vietnam and India.
Elsewhere, Chinese exporters of wire rod are fiercely competing for market share in the Middle East, Latin America and Southeast Asia, in the wake of anti-dumping measures imposed by the US government.
Pig iron price review
Finally, we have started a market consultation on a proposal to amend the price specifications for our weekly cfr Western Europe pig iron assessment, and we invite feedback from market participants.
Editor Vera Blei looks at the main news covered by Steel First this week.