Turkish long product producers are now seeking a higher price for reinforcing bar and merchant bar to reflect rising production costs. Smaller re-rollers have opted to stop producing altogether and have brought forward maintenance work. On the flat products side, heavy discounting of unsold material has failed to invigorate buyer interest. Some end-users have started purchasing material on a cash-basis but volumes are low and fall short of what is required to deplete stockpiles.
The outlook for the long and flat products markets in the Russian Federation and the Ukraine remains ominous. Demand in these CIS states has been adversely affected by the deteriorating trading conditions. Order intake from the manufacturing and construction industries remain soft. Structurals' production has been reduced again owing to the downturn in construction activity, and producers are now rationalising their product mix to correspond with the new market conditions.
Construction activity continues to support the South African steel industry. The outlook for the flat products segment is less positive. Bookings have temporally risen this month owing to ArcelorMittal’s new offers which are on average 10 percent lower than those in October. Softening downstream consumption remains a concern. Orders from the automotive and household appliance sectors continue to be depressed.
The UAE has not entirely escaped unscathed by the downturn in the global economy. The real estate building activity has been checked by the credit crunch. There are genuine fears of the US style property crash in the region. Pressure is also mounting on distributors to liquidate their holdings of quayside material. Sellers have yet to disclose their response to the Dubai Port Authority's decision to raise its storage fees. Some market participants assert that this could hasten further price corrections.
Local shipments to the Indian market have shown signs of wilting in the back drop of a global recession. Poor order books have left producers with stockpiles of unsold material. The mills have announced various measures to counter the slowdown in demand. So far none of them have revised their output. Steel Authority of India Ltd (SAIL) has reduced steel prices in the range of Rs4,000 to Rs6,000 a tonne across all product categories, and is offering concessions. Other private sector steel companies lowered prices of their products in phases during October but SAIL held their values steady.
The Mexican steel market is still depressed. Domestic orders remain soft and are not expected to improve in the interim. The steel consuming industries have reduced their steel requirements and are looking at ways to cut their costs. Traditionally, these manufacturers would have benefited from a weak Mexican peso but US consumer spending is down to levels not seen since the 1990s.
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