Thursday, August 03, 2017

Chinese export activity

Global crude steel production mid-way through 2017 was 4.5% higher than in the first 6 months of the previous year. Despite much talk about cuts in Chinese capacity, Chinese crude steel production grew by a marginally higher amount. The growth in Chinese production is attributed to the government-led infrastructure push which has maintained very strong demand levels from the construction sector, fuelling demand for products such as rebar and sections. Infrastructure demand does not appear to be weakening with Chinese crude steel production growth in June alone reaching 5.7%, significantly ahead of the rest of the world figure of 0.7%.

The strength of Chinese domestic demand has also had an impact on export levels. In addition to crude steel production growth of 4.6% in the first half of 2017, export volumes have reduced by more than 28% as product is diverted to the domestic market. This trend looks set to continue with the June figure alone reflecting a collapse in export volumes with levels down by nearly 38% year on year, albeit against a very strong June 2016 figure. Export volumes have been trending downwards, relative to the previous year, for the past 10 months.

This decrease in exports has not been seen uniformly across all products, however. It is clearly the products commonly used in the construction sector which have seen the largest decline with exports of hot rolled bars and flats down by 67%. In contrast, flat products have actually not seen much of a decline at all with exports of specific products growing year on year. Exports of CR, for example have grown by 30% and HDG is 4% higher than in the previous year.

A closer look at HDG, one of the products where exports have grown, indicates that Chinese producers have been targeting certain European markets. Shipments to Italy, the UK and Spain have grown by 32%, 42% and 88% to 250K tonnes, 218K tonnes and 194K tonnes, respectively, in the first half of the year. The need for export growth in this product has been encouraged by the decision by Vietnam, the second largest market for Chinese HDG, to impose anti-dumping duties as high as 38% on the product.

Despite the fact that Chinese exports levels are in decline China continues to fill the role of the world's main exporter, with levels more than double those of Japan, the second main exporter. Chinese export activity in 2017 is still likely to exceed 70 million tonnes and so will continue to have a serious impact on the fortunes of the global steel industry. In addition, as more and more markets decide to erect trade barriers to Chinese steel, this is likely to lead to further spikes in exports of certain products to some markets, particularly those less inclined to enact strong anti-dumping legislation.

The text above was prepared by ISSB.

For a file showing Chinese exports split by product for the first half of the year, please visit ISSB for more information on the global steel industry.


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Thursday, July 06, 2017

Growth in Indian steel exports

Much has been made of the meteoric rise of Chinese steelmaking over the past decade but as we have discussed before this peaked in 2014. There is another major Asian steel producer, believed to be the lowest cost major producer in the region, that has more than doubled crude steel production since 2005 and is continuing to grow, posting a record 95.6 million tonnes last year, a growth of 7% compared to the global growth rate which was just 1%. After the record tonnage posted last year, in the first five months of 2017, Indian crude steel production grew by another 7%. At this point in 2018, if the rate of growth stays the same, India will have overtaken Japan to become the second largest producer of steel in the world.

This growth in steel production has coincided with a decline in imports. At just under 10 million tonnes, imports are relatively modest for a country of this size and last year they collapsed by 25%. This decline has continued into the first quarter of 2017 with Q1 imports declining by another 43% year on year with falls seen across most products. There have been declines in supplies across most origin countries but Brazil and China seem to have been hardest hit. Whilst China is still, just about, the largest supplier of steel to India, imports have decreased by 64% so far this year as anti-dumping legislation has taken effect.

Conversely there has been a huge increase in exports. Last year there was a 37% growth in exports and at 10.3 million tonnes, the country became a net steel exporter for the first time. So far this year, export growth has accelerated considerably and Q1 saw a 157% hike in exports to more than 5 million tonnes which, if maintained for the rest of the year, would make the country the 6th largest exporter in the world. The growth has mostly come from HRC, CRC and semis with the EU accounting for the bulk of this increase. Indeed, in Q1 alone, India increased exports to the EU by more than 1.2 million tonnes with Italy, Spain and Belgium seeing most of this growth.

According to the union minister of steel, the country is targeting a trebling of last year's production total by the end of 2031 with the focus being on higher-value finished products. Although projections for internal steel demand are also high, it seems clear that a proportion of this growth will make its way into exports.

We have a situation where India is likely to become the second largest producer of steel in the world next year, where imports are dropping, being discouraged by robust anti-dumping legislation, and exports are set to more than double, with EU markets being the main targets. Having been a net steel consumer in the past, India is now becoming a major supplier to the global market, at least in specific product areas and to certain markets.

For a file showing Indian exports by product, please follow this link or visit the ISSB for further information.

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Saturday, June 10, 2017

Iranian steel exports on the rise

At just under 18 million tonnes last year, Iran accounted for more than half of all the steel produced in the Middle East and is becoming an important player on the world stage. It is also growing rapidly with production up 90% over the past ten years. This growth has continued into this year with crude steel production in Q1 increasing by 13% year on year, more than double the global rate of growth.

Iran, as with many rapidly developing steel producing nations, has traditionally imported more than it exported but, partly due to its chequered relationship with the international community, the country is also more self-sufficient than many nations as it is unable to rely on being able to access Western products under sanctions. Imports of around 4.5 million tonnes per year are dwarfed by the domestic production of 18 million tonnes. Unlike imports, which have remained fairly stable at this level over the past few years, the country has started to export more tonnage as it finds itself less encumbered by international sanctions.

In 2016, for the first time, Iran exported more than it imported with exports of 5.7 million tonnes representing a 49% increase over the prior year This is a trend that has continued into 2017 with Q1 exports showing a further 20% growth when compared to Q1 2016. The vast majority of these exports, some 79% of the total so far this year, have been ingots and semis but the country has also exported significant tonnage of rebar and heavy sections.

As would be expected, Iran has traditionally exported these semi-finished products to other countries in the Middle East and North Africa but so far in 2017 it is notable that Iranian producers are becoming bolder in their search for external markets and the main growth areas have been Thailand, Taiwan and Indonesia. The same cannot be said for the growth in exports of rebar and heavy sections with the increase in shipments instead heading to Afghanistan and Iraq, no doubt filling demand resulting in efforts to rebuild in those nations following years of turmoil.

Conversely in Q1 this year, after a few years of stable tonnages, imports nearly halved despite a rise in demand. Traditionally the country is an important market for Russian, Chinese, Indian and Korean flat products but evidence suggests more or both HR and CR products have been sourced internally.

With enviable reserves of natural resources, being favourably situated between Europe and Asia, and having a growing internal steel industry, Iran has the potential to be a significant force on the global market. Incumbent president Hassan Rouhani's recent re-election suggests there is a desire within Iran to integrate further into the international community, thereby increasing the risk of potential disruption to the international steel market from Iranian steel; but the current US president's recent comments during his visit to Saudi Arabia suggests that the USA may potentially not be a viable market for Iranian goods should he enact embargos against the country, meaning they would likely have to look east to Asia or west to Europe for markets for their growing exports.

This report was prepared by the Iron & Steel Statistics Bureau, UK. Please contact ISSB for further information

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Wednesday, February 08, 2017

Price of steel tinplate

Did you know that we shown monthly tinplate prices on our website?
For the latest world tinplate prices, visit us at http://www.steelonthenet.com/steel-prices.html.

Better still why not subscribe to our steel price service, and get access to steel prices for the last 15 years?  
The cost is just $120 per year.

Regards.

Andrew M Kotas

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Tuesday, February 07, 2017

Aerospace steel news

Looking for aerospace steel news – or other high strength metal sector news?

Andrzej M Kotas

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Thursday, December 29, 2016

Rebar prices

We now show historic steel prices on our website including rebar prices as well as HRC, CRC and other price data.The historic data goes back to year 2001 and is shown monthly.

blogger@steelonthenet.com

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Wednesday, December 28, 2016

World steel prices 2001 - 2016

We now show world steel prices for the period 2001- 2016 on our website. Visit us at http://www.steelonthenet.com/steel-prices.html.

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Monday, December 12, 2016

End-2016 changes in steelmaking input costs

If you are watching steelmaking input costs, you will have noticed the marked increases in input costs of recent months. For example,

- Thermal coal has moved from $78/tonne in September to $107 in November 2016 (Australian coal, fob Newcastle/Port Kembla)
- Iron ore has moved from $57/tonne to $72/tonne (Chinese imported iron ore fines (62% Fe spot, CFR Tianjin port)
- Natural gas has increased from $4.01 to $4.54/m BTUs (Russian origin - border price in Germany expressed in US $ per million metric British Thermal Units).

The full time series for these costs can be seen at http://www.steelonthenet.com/commodity-prices.html.

According to Platts, met coke prices also doubled earlier this year (see http://www.platts.com/latest-news/metals/singapore/seaborne-metallurgical-coke-price-doubles-jan-27661511).

Surely steel prices will catch up soon?

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Thursday, September 08, 2016

Chinese and other threats to European Rebar Producers

The following extract is from an ISSB discussion about future threats to European producers of steel rebar.

Deformed Rebar is a very important product for certain European long product producers. After Turkey and Ukraine, the other countries in the top five exporters list are the Southern European nations of Italy, Spain and Portugal. It may come as a surprise to learn that Algeria is the most important export market for each of these countries with Italy alone shipping around 1.2 million tonnes of rebar to the country each year. This important market accounts for about 76% of all tonnage exported from Italy and about two thirds of exports from Spain.

Southern European producers enjoy a fairly unique situation in Algeria as a 2005 agreement between Algeria and the EU permits free trade between the two regions and Algeria imposes an import duty on shipments from the dominant player in the market, Turkey. Despite this, however, there are indications that this beneficial situation may not carry on indefinitely.

In a situation familiar in other parts of the world, Chinese rebar producers have identified an opportunity in Algeria and Chinese exports of all HR bars to the country have increased from 131 tonnes in 2013 to 345,000 tonnes in 2015 and a further increase so far in 2016. This already seems to have had the effect of displacing Spanish and Portuguese tonnage as exports from Spain have fallen by 440,000 tonnes in the same period whilst shipments from Portugal were down 141,000 tonnes. The Italian producers seem to be more aggressive in defending their market share, however, with more modest declines.

The long-term threat may not actually be coming from China, however, as in the face of falling tax revenues from the collapse in the oil price, the Algerian government is looking to diversify its industry away from the oil and gas sector. In order to facilitate this, they are looking to invest in steel projects and are mandating that government sector end users prioritise locally produced products over imports. In addition, the government has imposed a two million tonne limit on rebar imports this year and has revoked some import licenses.

On the supply side, Tosyali Algerie has a 500,000 tonne a year rebar mill which started production in 2013 and has initiated an expansion to nearly double its steelmaking capacity, although a timeline for the project has not yet been announced. The old Arcelor Mittal plant, which passed into the government's hands in October has a 400,000 tonne per year rebar mill and it is looking to add another long products mill with a capacity of one million tonnes by 2017. Finally, a joint venture between the state owned steel company and Qatar Steel has been initiated which is expected to have a 750,000 tonne per year rebar mill up and running by the end of 2017.

So far this year Italian exports have increased by 6% and Portuguese exports grew by 21%, offset by a 34% decline in Spanish shipments but how long can European producers hang on to this vital market given the two-pronged assault from Chinese producers and the measures taking place to grow the rebar industry within Algeria itself? Given that combined, these three countries supply well over two million tonnes a year to Algeria, the loss of this market would likely have profound consequences for the rebar industry in Europe.

For further information on steel-related statistics and data, visit http://www.issb.co.uk


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Tuesday, August 30, 2016

Iron ore price forecast

The international iron ore price is set to collapse later this year. According to a new analysts’ report, the price of the raw material will drop to a year-end low of $US37 a tonne, averaging $US47 in the fourth quarter and $US38 in the first three months of 2017.



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