STEEL WEEK IN BRIEF: Scrap prices rise slowly, billet prices up, Section 232 dominates in USA...

Metal Bulletin reviews the major stories affecting the steel market over the past week.

Global scrap markets were looking for a clear direction, with international prices inching upwards, while demand was moderate during the working week from Monday June 19 to Friday June 23.

Turkish steel producers booked deep-sea scrap at a slow pace during the final week of the Islamic holy month of Ramadan, while the Taiwanese market was unclear because of a local price drop.

Turkish scrap import volumes continued to rise as output from the country’s electric arc furnaces (EAFs) rose in January-April this year, according to the Turkish Statistical Institute (TÜIK).

Meanwhile, low stock levels will force steelmakers in India to ramp up their purchases of ferrous scrap, but only after a reform of India’s tax system comes into force next month.

In China, delegates at an industry conference in Zhengzhou, Henan province, said that ferrous scrap prices in the country have bottomed out, but gains are likely to be limited.

And China’s biggest ferrous scrap consumer Shagang raised its purchase price for the steelmaking raw material for a second time in less than a week.

Meanwhile, seaborne iron ore prices edged up on Friday June 23, amid a pick-up in trading activity towards the end of the working day in Asia. Metal Bulletin’s 62% Fe Iron Ore Index ended the week at $56.75 per tonne cfr Qingdao – up by $0.22 on a daily basis.

In the coking coal sector, trading activity in the seaborne market continued to rise, in anticipation of domestic production cuts in China keeping buying interest buoyant.

Steel
In China, spot rebar prices continued to fall for a fourth continuous day on Friday as pessimism grew, while hot rolled coil (HRC) prices retreated as trading activity wound down amid a temporary drop in the futures market.

North-east China’s Benxi Iron & Steel (Bengang) is rolling over the prices for most of its mainstream flat steel products for a second consecutive month, while Eastern China’s steel major Shagang has rolled over its long steel prices for late June.

Import prices for steel billet in Southeast Asia moved up over the week due to higher offer prices and the impact of defaults from Chinese suppliers for previous deals.

Steady demand in the Egyptian market over the past two weeks has seen CIS billet exporters achieve higher sales prices in recent deals.

Turkish billet export prices inched up in line with rising imported scrap costs, while domestic and imported billet prices were comparatively stable.

Turkish buyers have booked about 50,000 tonnes of HRC from Russia and Ukraine.

Indeed, CIS export prices for HRC have remained firm over the past week, supported by an uptick of buying activity in Turkey.

In Northern Europe, major producers of HRC are refusing to accept lower prices despite the downbeat mood of the market.

Prices for steel beams inched up in Northern Europe this week, as sources told Metal Bulletin that the market is likely already to have reached its lowest point.

Rebar producers in Southern Europe have achieved higher prices in the domestic market and hope to raise export offer prices as well.

In Brazil, Usiminas is considering an eventual HRC price increase for the domestic market.

In the USA, prices for special bar quality (SBQ) steel products have risen by some $40 per tonne as base price increases for June took hold, while USS-Posco Industries (UPI) has increased prices for all of its steel sheet products by at least $50 per net ton ($2.50 per hundredweight) with immediate effect.

And global slab markets could see further downward pricing pressure if plans to build a plant for slab production in Iran come to fruition. Companies from Iran and Austria will collaborate on building a slab plant in the south of the country.

Trade policy

Eurofer has called on members of the European Parliament (MEPs) to support a report on new anti-dumping methodology.

The European Commission has started an anti-dumping investigation into imports of low-carbon ferro-chrome to the European Union from China, Russia and Turkey.

The Turkish steel industry has continued its legal struggle at the World Trade Organization (WTO) against a countervailing duty imposed on its steel exports, according to the Turkish Steel Exporters Assn (ÇIB).

The Gulf Co-operation Council (GCC) has proposed introducing a 31% safeguarding duty on imports of colour-coated coil, according to the World Trade Organization (WTO).

Brazilian steelmakers are planning to file an anti-dumping case against imports of zinc-coated steel products, according the country’s flat steel association, Inda.

Australia has extended, for a second time, the deadline for an anti-dumping investigation into imports of alloy round steel bar from China.

Around the world

The US market continues to speculate on the likely impact of the Section 232 investigation into the ‘national security’ threat of imports.

The US Department of Commerce may be leaning towards applying a hybrid system of quotas and tariffs in its Section 232 investigation into steel imports.

Restrictions on steel imports based on a Section 232 investigation would weaken the economy, threaten national security and launch a brutal trade war, according to end-user industries.

Chinese steelmaker Delong Holdings is planning to set up a joint venture to build and operate a 3.50 million-tpy stainless steel plant in Indonesia.

Global demand for high-strength steel products for the automotive industry will increase by 35.34% between 2017 and 2020, according to Swedish steelmaker SSAB.

Global crude steel production rose by 2.02% year-on-year to 143.32 million tonnes in May 2017, according to the World Steel Assn (Worldsteel).

Over the same period, global output of direct reduced iron (DRI) increased by 8.49%, to 5.13 million tonnes, Worldsteel added.

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