STEEL WEEK IN BRIEF: Section 232 quotas, extensions, recovering scrap prices, DCE opens up futures market to overseas investors

Metal Bulletin reviews the major stories that have affected the steel market over the past week.

Ferrous scrap prices in the major global markets remained firm, with the exception of the United States.

Although Turkish steel producers halted their deep-sea scrap purchases at the end of last week, suppliers have kept their offers strong. Indian scrap prices were rising, while conditions in the Taiwanese scrap market have been mostly stable.

Fears of a slump in pig iron export volumes from Russia to the US resulting from geopolitical issues appear to be groundless, with no apparent slowdown from the 10-year-high import rates seen in 2017.

End-users withdrew to the sidelines in the seaborne coking coal spot market on Friday as they waited for clearer market direction. Metal Bulletin’s cfr China Premium Hard Coking Coal Index was unchanged at $190.19 per tonne, while its fob Australia equivalent was up $3.31 per tonne to $179.14 per tonne.

In the iron ore market, prices slipped to $66.28 per tonne in line with paper trading on Friday, the first day China’s Dalian Commodity Exchange opened up its futures market to overseas investors.

Indeed, iron ore futures on the DCE have gained increasing influence over the physical market since listing in 2013. Their trading volume reached 657.49 million lots, or 65.749 billion tonnes, in 2017, down 3.95% on the year.

Singapore Exchange and the Chinese Stainless Steel Exchange based in Wuxi city, Jiangsu province, also continue to expand and gain importance.

China’s domestic hot-rolled coil and rebar prices were flat on Friday, with trading activity decreasing ahead of the weekend.

But East China’s Shagang has further increased its long steel product prices for shipment in early May to match the gains seen in the spot market.

Import prices for steel billet in Southeast Asia have edged up again despite the level of general demand remaining soft, while prices for slab fell on lower offers after a period of high prices that lasted for several weeks.

On the other hand, prices for Iranian exports of steel billet and slab decreased somewhat, with customers targeting lower prices because of the unstable conditions in the global billet market.

Turkish domestic and export billet prices have increased, which reflects a recovery both in demand and in domestic long steel prices.

The price of steel billet imported into Egypt increased slightly, while local rebar prices were unchanged.

Domestic prices for mesh-quality wire rod produced and delivered in both northern and southern Europe have widened downward because of reduced demand.

Domestic prices for hot-rolled coil in southern Europe have fallen slightly, although the direction in which prices are moving is not entirely clear because the market has been slowed by holidays in Europe.

Local prices for rebar in Brazil have increased in early May, which reflects efforts by several producers to put upward pressure on the market throughout the year to date.

Buying activity for imported flat-rolled steel might slow in the US due to deep uncertainty around steel prices created by the Section 232 tariffs and quotas.

And Vallourec USA has announced a price increase of $300 per tonne on oil country tubular goods.

Trade policy
Metal Bulletin published the April update of its steel trade case monitor.

Mills in the US have been injured by imports of carbon and certain alloy steel wire rod from Italy, South Korea, Spain, Turkey and the United Kingdom, the US International Trade Commission said.

The European Commission has decided to reopen its anti-dumping investigation into imports of tubes and pipes of ductile cast iron originating from India as a result of requests from EU producers and Indian producer Electrosteel Castings Ltd.

Around the world

The US has postponed imposing Section 232 tariffs on steel and aluminium imported from the European Union, Canada and Mexico until June 1.

The decision to extend Europe’s exemption from Section 232 tariffs until June 1 only serves to prolong the uncertainty, the European Commission and European steel association Eurofer said.

The US administration has also agreed permanent to exemptions from tariffs for Australia, Brazil and Argentina.

Moreover, it said that the Section 232 annual quota on steel imports from South Korea will be tallied retroactively to January 1.

Meanwhile, China could be badly affected by a shrinking import market for hot-rolled coil in Vietnam once Formosa Ha Tinh Steel fires up its new blast furnace this month.

Analysts expect ArcelorMittal’s earnings for January-March 2018 to increase by 4.08% year on year.

And finally, blast furnace No9 at Ukraine’s major steelmaker, ArcelorMittal Kryvyi Rih (AMKR), remains out of operation after an accident on April 29, when equipment was being recommissioned after almost three months of capital repairs.

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