Steel price growth remains limited in emerging nations - MEPS

UK based MEPS said that Brazilian flat product steelmakers adopted aggressive pricing positions during July 2012. Distributors have condemned the upward adjustment as unwarranted given the current trading climate and are deliberating whether to revert to importing again. Construction activity has fallen short of industry projections. Price competition has intensified in the Mexican market. Domestic mills have persevered with their US dollar indexed pricing strategies.
Russian distributors remain cautious over the strength of underlying consumption in the August and September 2012 period. Most do not expect to witness a significant price recovery. Market fundamentals remain weak. The mills plan to avoid offering discounts and more favorable payment terms, fearing such measures would be counterproductive and only fuel further instability. The business climate in Ukraine remains arduous. Domestic steelmakers are under pressure to downgrade plant utilization rates. Price support from external demand has continued to deteriorate.
Challenging business conditions persist in India. Market sentiment has been eroded by power cuts, weak underlying demand growth and deteriorating economic fundamentals. The trading environment has deteriorated in China. MEPS' sources remain bearish over the general market trend in the near term.
Turkish producers are faced with a dilemma of whether to ride out the difficult trading conditions or downgrade planned production targets. The recent price volatility has unsettled the distribution network. Demand for construction steel in the United Arab Emirates has been deflated by the close proximity of the summer and Ramadan. Domestic steel facilities are now looking to export their August and September 2012 period rolling campaigns, due to lethargic domestic sales and continued pressure from low cost foreign supply.
The outlook for the South African steel market is unchanged. Deliveries to downstream industries have stagnated. The pricing policy of ArcelorMittal South Africa and Evraz Highveld continues to be heavily influenced by the strength of the national currency and is unchanged.
Source - MEPS - Developing Markets Steel Review