Eurobench.com

voda 27 juni 2014 14:01

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TATA Steel to cuts Corus debt cost with cheaper loans

Bloomberg reported that TATA Steel Limited is tapping into the lowest foreign loan rates in six years to cut the cost of debt that funded its 2007 takeover of the UK's Corus Group.

People familiar with the matter said that India's biggest steelmaker is in discussions with banks to raise USD 3 billion to refinance borrowings that were used in the USD 12.9 billion acquisition.

Margins on local companies' non rupee loans averaged 171 basis points this half, the lowest since 2008 compared with 197 in the 6 months ended December 31st.

According to Aquarius Investment Advisors Pte, TATA Steel has returned to profit on reviving demand in Europe, after a record loss in the Q1 of 2013, and a new Indian government is boosting optimism that its domestic market will recover. Monetary easing by global central banks from the Federal Reserve to the European Central Bank has buoyed investor appetite for emerging market debt.

Mr A S Thiyaga Rajan SMD at Aquarius in Singapore said that "There's definitely a new found optimism across the globe. TATA Steel's earlier debt is more expensive and its replacement will help straighten the company's bottom line."

Indian companies raised USD 14.7 billion in foreign currency loans in the first half, the most in such a period since 2011, as borrowing costs abroad fell even as those at home remained at the region's highest levels.

Reserve Bank of India governor Raghuram Rajan has held the repurchase rate at 8% after raising it by 75 basis points, or 0.75 percentage point, from September through January to temper inflation. Policy rates are near zero in the U.S., Europe and Japan.

According to a JPMorgan Chase & Company index, the yield on 5 year AAA corporate notes in India rose 47 basis points since mid 2013 to 9.16%, while that on 10 year government debt jumped 126 basis points to 8.7%, data compiled by Bloomberg show. The average rate on Indian companies dollar bonds dropped 99 basis points to 4.6%.

Source - Bloomberg

voda 27 juni 2014 14:05

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Chinese steel prices stabilizes on good economic news

At long last there was some glimmer of hope in the steel and iron ore market with government indicating about possible stimulus and some local governments have started to implement small stimulus measures to boost activity.

Contract prices for September iron ore on the Dalian Commodity Exchange have risen in a day by CNY 24 per tonne to CNY 717 per tonne the highest level since May 28. Rebar contract prices for October have gone up CNY 36 per tonne on the Shanghai Futures Exchange to CNY 3,115 per tonne the maximum level since May 29.

However, modest demand for finished products presently can clip the wings of fledgling rally. Moreover any talks about a slowdown in the economic growth again by the government will puncture the stability exuded during last week.

Source - Strategic Research Institute

voda 27 juni 2014 14:07

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Brazil to impose anti dumping duty on seamless pipe imports from Ukraine

Brazilian Chamber of Foreign Trade has announced that Brail will impose for imposition of a provisional anti-dumping tax on seamless steel tubes imports from Ukraine.

The imposition of anti-dumping period would valid for 6 months. Meanwhile, CAMEX has indicated the seamless steel pipe will be taxed including the outer nominal diameter up to 5 inches.

Anti dumping rates range from USD 145.78 per tonne for companies including Interpipe Niko Tube LLC and PJSC Interpipe NTRP to USD 637.74 per MT of other companies.

Source - www.yieh.com

Regenboog33 27 juni 2014 14:07

0

quote:
voda schreef op 27 juni 2014 14:05:
Chinese steel prices stabilizes on good economic news

At long last there was some glimmer of hope in the steel and iron ore market with government indicating about possible stimulus and some local governments have started to implement small stimulus measures to boost activity.

Ziet er goed uit, mag ook wel eens een keer zo zijn dat Mital een keer de weg omhoog gaat vinden.

voda 27 juni 2014 14:18

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Brazil's iron ore exports rise in May

According to data released by the Brazilian Ministry of Development, Industry and Foreign Trade, Brazil’s iron ore exports totaled 30.69 million tons in May, increasing by 24.25% from a month ago and increasing by 12.92% YoY.

The country’s export revenues generated by iron ore totaled USD 2.59 billion in May, rising by 25.73% from a month ago but falling by 12.09% YoY.

In January to May period, the country’s iron ore exports amounted to 127.19 million tons, rising by 7.4% YoY.

Source - www.yieh.com

voda 28 juni 2014 16:41

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TATA Steel has no more iron ore imports to feed factories

Economic Times cited Mr TV Narendran MD of TATA Steel as saying that the company has no more plans to import iron ore to feed its steelmaking factories and will rely on domestic production from its own captive mines or National Mineral Development Corporation.

TATA Steel imported about 0.5 million tonne of iron ore from Australia to tide over the temporary closure of its mines in Odisha in May. All of TATA Steel mines have reopened thereafter, providing necessary supply of the commodity to produce steel. The company also had a disappointing experience dealing with ports and railways as it used to import and transport the ore.

Mr Narendran said that "It was good we imported because we realised the Indian ports particularly in the eastern seafront were not designed to import iron ore. So you had limitations in which ports could handle vessels. We anyway don't have ports that can handle big vessels."

He said that “Apart from the absence of adequate infrastructure at ports, TATA Steel faced issues with the Indian Railways, which is not used to transporting imported iron ore. We realised railways didn't have a freight rate to move the material from the port to the factories. They had never planned that there would be iron ore that would be coming into India."

According to industry experts Indian Railways gives preference to coal shipments over iron ore shipments. Despite a sharp fall in international iron ore prices, TATA Steel is not looking too keenly at importing the commodity from other countries, saying global prices are not attractive enough currently. The cost of extracting iron ore from Indian open cast mines still comes out cheaper than current global prices.

Mr Hitesh Avachat group head research for mining at CARE Ratings said that “Raw material freight too forms a big component of cost. "Indian Railways always gives preference to coal as it feeds power plants in the country. This is going to be a problem for Indian companies that are looking to import more iron ore.”

TATA Steel has the luxury of not yet importing iron ore, unlike most other steelmakers in the country. India, which was once a net exporter of the iron ore, is on the verge of becoming a net importer with strict mining caps imposed in various states.

Other steelmakers in the country are looking at the option of importing iron ore seriously if production from mines in Odisha comes down. Even though mines allotted to Tata Steel and SAIL have been cleared by the state government.

Source - Economic Times

voda 28 juni 2014 16:43

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Iron ore at one month top and set for best week in 10 months

Reuters reported that iron ore rose to its highest level in nearly a month and was on track for its biggest weekly increase since August as buying interest gained momentum after a 30% fall in prices this year.

Iron ore futures in top consumer China rose for a fifth day in six spurred by hopes that an improved outlook for the world's No. 2 economy may strengthen demand while supply has probably peaked.

Mr Mark Pervan head of research at Australia and New Zealand Banking Group said that "I think we've passed the bottom. Most global miners have already hit their increased capacity so there is unlikely to be another substantial increase in supply while Chinese mills that are running low on iron ore inventory may restock more in the second half of the year.”

Benchmark 62% grade iron ore for immediate delivery to China climbed 1.7% to USD 95.30 a tonne on Thursday, its highest since May 29th based on data compiled by Steel Index. Iron ore has gained 3.5% so far for the week, already its largest increase since mid August.

Mr Pervan said that "I think we'll probably reach USD 100 in the near term. It's not out of the question, we're coming from an oversold positionand USD 100 is still a cheap market."

Iron ore, the top business for global miners Vale, Rio Tinto and BHP Billiton has stayed below USD 100 since May 19th, falling to a 21st month trough of USD 89 on June 16th.

Prices have since recovered, helped by gains in Dalian futures which have similarly scaled 1 month peaks on renewed optimism in the Chinese economy after a survey on Monday showed factory activity expanded in June for the first time in 6 months.

Iron ore for delivery in September on the Dalian Commodity Exchange was up 0.9% at CNY 714 per tonne, after hitting a session high of CNY 719 earlier, its loftiest since May 28th. For the week, the contract has risen 6%.

Trader said that prices for spot cargoes from Australia and Brazil rose this week in a flurry of deals with most of the shipments snapped up by traders.

A trader in Shanghai said that some big trading companies in China need to pay their bank loans by the end of this month so they need to sell as much
cargo as they can.

Trader said that a cargo of Australian 61% grade Pilbara iron ore fines was sold at around AUD 95.50 a tonne at a tender up from AUD 93 earlier in the week. Despite this week's gain, the benchmark iron ore price is still down by 29% this year.

Source - Reuters

voda 28 juni 2014 16:44

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Australia shares seen little changed as iron ore rises

Reuters reported that Australian shares are set to open steady after a soft close on Wall, while a jump in spot iron prices to above AUD 95 per tonne may support big mining stocks.

Local share price index futures added 3 points to 5429.0, a 35.3 point discount to the underlying S&P/ASX 200 index close. The benchmark rose 62.31 points to 5,464.32 at close of trade.

New Zealand's benchmark NZX 50 index gained almost 9 points to 5,139.03 in early trade. US stocks dipped after the president of the Federal Reserve Bank of St. Louis said that interest rate increases should come sooner rather than later.

Spot iron ore rose to AUD 95.30 overnight, continuing a recovery from last week's 21 month low. Tin prices slipped to their lowest in more than four months despite forecasts of deficits, while copper pulled back after touching a new peak.

Source - Reuters

voda 28 juni 2014 16:46

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Russia's crude steel output rises in May

According to data released by Russtat, Russia’s crude steel production totaled 29 million tonnes in January to May period, remaining flat from a year ago.

In the given period of time, the country’s steel product output totaled 25 million tonnes up by 0.6% YoY.

In May alone, Russia’s crude steel output increased by 1.8%; its steel product output rose by 2.9%, both compared to figures in the same month of 2013.

Source - www.yieh.com

[verwijderd] 28 juni 2014 19:39

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China moet rekening houden met een vertraging van de economische groei ten opzichte van de enorme groeicijfers die in de voorbije jaren zijn gerealiseerd. Dat heeft de Chinese president Xi Jinping dit weekeinde gezegd.

China moet volgens de president wennen aan 'het nieuwe normaal' en het hoofd koel houden als het groeitempo vertraagt, zo meldde het Chinese staatspersbureau Xinhua gisteravond. Tegelijkertijd wees hij erop dat de fundamentele uitgangspositie van de Chinese economie niet is veranderd en dat er nog altijd goede kansen voor verdere groei zijn.

De Chinese regering probeert een balans te vinden tussen het op peil houden van de economische groei en het afremmen van de onstuimige kredietverlening in het land. Met belastingvoordelen en extra investeringen in onder meer infrastructuur mikt de regering daarbij dit jaar op een groei van 7,5 procent.

Laagste peil sinds 1990
Volgens gegevens van het Internationaal Monetair Fonds (IMF) zou de economische vooruitgang daarmee terugvallen tot het laagste peil sinds 1990. Voor de komende jaren voorziet het fonds een verdere vertraging, tot circa 6,5 procent in 2019.

De Chinese premier Li Keqiang liet vorige maand al weten dat zijn regering niet van plan is de groei met omvangrijke stimuleringsmaatregelen aan te jagen. Veel economen verwachten wel dat de Chinese centrale bank zijn beleid wat zal versoepelen, ook omdat de inflatie in China vorige maand aanzienlijk is teruggevallen.

De Amerikaanse minister van Financiën Jack Lew benadrukte dit weekeinde nog eens het belang van economische hervormingen in China. 'Ze moeten zich duidelijk zorgen maken over hun economische situatie op korte termijn', stelde Lew voorafgaand aan zijn bezoek aan Peking later deze week. 'Maar ze kunnen de hervormingen voor de langere termijn niet blijven uitstellen.'

[verwijderd] 28 juni 2014 19:40

0

www.volkskrant.nl/vk/nl/2680/Economie...

voda 29 juni 2014 15:49

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German automotive industry benefits from new slitter for advanced

Europe's second largest steel producer, TATA Steel, has further strengthened its commitment to the automotive industry with the unveiling of its new slitting line to process advanced and ultra high-strength steels. The opening demonstrates Tata Steel's support for German and other European car manufacturers and its commitment to present and future innovation.

The slitter and associated expansion at the steel producer's Ruhr based Steel Service Center in Gelsenkirchen, Germany was officially inaugurated today after an investment of EUR 9.5 million. As well as raising the service centre's capacity, the new line will also expand its processing capabilities.

The new slitting line the centre's second is specially geared up to process advanced and ultra high-strength steels, which are used to manufacture demanding automotive applications used in chassis, suspension, wheels and seats. They include advanced high strength steels with unique forming capabilities for chassis and cold rolled advanced high strength steels for light weight seat components.

The new slitter, which led to the creation of 30 new jobs, will be able to process steel coil in thicknesses of 0.4 mm to 4 mm and widths of up to 1,650 mm with a maximum yield strength of 1,400N/mm2.

TATA Steel has also further strengthened its dedicated account management team for the automotive sector, increasing the number of staff looking after customers at its Dusseldorf office. This will allow the steel producer to better serve customers and provide suppliers to the automotive industry in Germany with on the ground, specialist expertise and industry knowledge at close hand.

Mr Henrik Adam chief commercial officer of TATA Steel said that "This investment helps cement our position as a key long-term supplier for German customers in the automotive sector as we continue to find ways to help them succeed in their market. Our customers have asked for our presence in the German market and with this investment we have answered their request, tailoring our capabilities to further meet their needs and offering local access to our company."

Mr Jochen Hofges MD of Service Center Gelsenkirchen GmbH said that "In addition to the new slitter line, Gelsenkirchen Service Center will continue to support its customers with an individual, tailored and timely service, backed by specialist experts offering technical and customer service support for the automotive industry.”

He said that "Gelsenkirchen is ideally placed to offer an excellent service. The site has a private harbour which receives almost daily shipments of steel coil as well as excellent logistics with easy access to the motorway network. By strengthening our processing capabilities and expanding our sales force, we can continue to meet our customers' increasingly complex product and service requirements in this specialized, demanding and innovative market."

Mr Jens Lauber TATA Steel's MD for Distribution Europe said that "In order to be able to offer a more targeted response to end-customer markets, in recent months we have strategically realigned our sales activities in Germany and elsewhere in continental Europe. The realignment gives our customers local access to our wide portfolio of products and services."

Source -Strategic Research Institute

frenk7 30 juni 2014 09:32

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Weet iemand welk percentage ebitda bij Arcelor Mittal uit de auto industrie komt? AM heeft 6% van de wereld wijde staalmarkt maar ik zag meer dan 20% van het staal voor de auto industrie komt van Arcelor Mittal. Doordat de auto verkopen in april en mei fors zijn toegenomen: Europa 4%, Amerika 11% en China 13% wil ik graag weten wat dit effect op de cijfers van Arcelor Mittal is.

voda 30 juni 2014 16:18

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Hes Beheer rondt overname Atic Services af - Update

(Update van eerder gepubliceerd bericht 'Hes Beheer rondt overname Atic Services af' om extra informatie toe te voegen.)

AMSTERDAM (Dow Jones)--Hes Beheer nv (HES.AE) heeft de overname van het 78% belang van ArcelorMittal (MT.AE) in Atic Services sa afgerond, meldt zowel Hes Beheer als Arcelormittal maandag.

De transactie werd voltooid voor een overeengekomen prijs van EUR155,4 miljoen, meldt staalgigant ArcelorMittal in zijn persbericht, eraan toevoegend dat de verkoop in overeenstemming is met zijn strategie van selectieve desinvestering van niet-kernactiveiten.

Met de transactie verhoogt Hes Beheer zijn belang in Atic tot 100%.

Daarnaast meldt Hes Beheer dat ook de verkoop van zijn 50,1% belang in Ovet Holding bv aan Oxbow Coal bv is afgerond.

"De overname van Atic past goed in het beleid van HES Beheer om de activiteiten in de droge (en natte) bulk uit te breiden", meldt het concern in het begeleidend persbericht. "Daarnaast zijn de activiteiten verbreed door meer internationale spreiding, omdat ATIC actief is in onder meer Frankrijk, Duitsland en Polen."

Hes Beheer kreeg vorige week tijdens de Algemene Vergadering van Aandeelhouders toestemming van zijn aandeelhouders voor beide transacties.

Hes Beheer noteert omstreeks 16.00 uur 0,1% lager op EUR42,86.

ArcelorMittal verliest 0,2% tot EUR10,85.

- Door Patrick Buis; Dow Jones Nieuwsdienst; +31 20 571 52 00; patrick.buis@wsj.com

voda 30 juni 2014 16:22

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Herstel investeringen wereldwijd nog ver weg - S&P

AMSTERDAM (Dow Jones)--Herstel van het mondiale investeringsklimaat lijkt nog ver weg, nu mijnbouwers en metaalproducenten de broekriem aanhalen terwijl ook de investeringen in olie- en aardgassector lijken te stagneren, stelt kredietbeoordelaar Standard & Poor's maandag in een rapport.

De 2.000 grootste investeerders wereldwijd zwemmen in het geld, met niet minder dan $4.500 miljard of $4,5 biljoen aan contanten op de bankrekening. Toch verwacht S&P dat de mondiale investeringen door het grootkapitaal dit jaar met 0,5% zullen dalen en in 2015 zelfs met 3%, na een reele afname van 1% in 2013.

Daarmee blijven de wereldwijde investeringen voor het derde jaar op rij hangen rond $3,3 biljoen.

De daling wordt onder andere verwacht omdat metaalproducenten en mijnbouwers zoals BHP Billiton, Vale en Rio Tinto hun investeringen in kapitaalgoederen drastisch hebben teruggeschroefd in wat een meerjarige aanpassing lijkt te zijn.

Nog zorgwekkender zijn de signalen van stagnerende investeringen in de veel grotere wereldwijde olie- en gasindustrie, door grootmachten zoals Petrobras, Chevron, Gazprom en Total. De olie- en aardgasindustrie was vorig jaar goed voor maar liefst 42% van de investeringen van grote bedrijven vorig jaar, en voor negen van de tien plaatsen in de toptien.

Na een ruime verdubbeling van de investeringen in het afgelopen decennium lijkt de rek eruit bij de energieconcerns. Het wordt steeds moeilijker om nieuwe energiereserves te vinden en aan te voren, waardoor het rendement op geinvesteerd kapitaal onder druk staat.

De opkomende markten zagen de investeringen vorig jaar met 4% dalen en S&P verwacht voor dit jaar een vergelijkbare afname, ook in de vier grote BRIC-landen Brazilie, Rusland, India en China.

Herstel moet komen van andere sectoren zoals IT (zoals Apple, Google, Microsoft), medische zorg en telecom (Vodafone, America Movil). Nuts- en industriele bedrijven, vanouds grote investeerders, blijven minder investeren dit jaar.

De investeringen in West-Europa zijn bescheiden geweest, maar wel veerkrachtig vergeleken met andere regio's. Voor 2014 wordt bij ons een groei verwacht van 1%, omdat lagere investeringen door zwaargewichten Shell en Total in 2013 (respectievelijke $40 miljard en $31 miljard geinvesteerd) worden opgevangen door autofabrikant en telecombedrijven, zoals Volkswagen ($16 miljard), Daimler en Vodafone (beide $7 miljard).

Door Archie van Riemsdijk; Dow Jones Nieuwsdienst, +31-20-5715200 ; archie.vanriemsdijk@wsj.com

voda 30 juni 2014 16:53

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Europe launches AD investigations on stainless steel from China and Taiwan

The European Commission has launched an investigation into alleged dumping of stainless steel into the European Union by Chinese and Taiwanese producers.

EUROFER filed a complaint in mid May on behalf of companies representing a major portion of the Community production. Imports of stainless steel cold rolled flat products from China and Taiwan were sold at dumped prices and cause significant injury to the EU stainless steel industry.

Quantities of stainless steel cold rolled flat products from China and Taiwan into Europe have been rising at an alarming rate in 2013 although EU consumption remained rather stable. Their combined market share has grown by 65% between the years 2010 and 2013 (year 2013 being the investigation period) and this expansion went on in spring (Q1/14) at the expense of the EU producers. The market share of China and Taiwan was even in excess of 14% in the month of April 2014.

Mr Gordon Moffat DG of EUROFER welcomed the European Commission’s initiation against imports of stainless steel cold rolled flat products (SSCR) from China and Taiwan. Mr Gordon Moffat DG of EUROFER said that “During the last three years, the European producers of stainless steel flat rolled products carried out significant restructuring operations to reduce over-capacities, improve their performance and maintain their competitive edge in the global market. But over the same period China has built up huge capacities that are economically unjustified. Their increased output cannot be absorbed domestically. As a result they are flooding the markets which are still unprotected like the EU. Taiwan has also a structural over capacity problem and excess production which they download on export markets, particularly in Europe.”

Mr Moffat said that “This is no longer sustainable. The imports of SSCR from the two countries, China and Taiwan, significantly undercut the prices of the EU producers and prices from other third countries. The complaint shows that the dumping margin from these two countries reaches 20 per cent. Both from the volume and pricing aspects, the EU industry is suffering material injury as a result of these dumped imports and the causal link is obvious. Anti Dumping measures on imports of SSCR from PR China and Taiwan will be in line with the European Commission’s Steel Action Plan, ensuring fair conditions of competition and taking action against unfair trade practices.“

Source - Strategic Research Institute

voda 30 juni 2014 17:01

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China output in bloated steel industry continues to rise

Xinhua reported that output in China's steel industry has continued to rise and prices continue to fall, as the government struggles to reduce capacity in the sector.

The National Development and Reform Commission said that crude steel production gained 2.7% YoY to reach 343 million tonnes in the first five months of the year, although the growth was down 5.3 percentage points from the rate during the same period last year.

According to the NDRC, during the January to May period, the steel price index came in at 95.09, down 0.66 from a month earlier. In the first four months, the steel industry earned CNY 41.2 billion down 16.4%.

The government has been at pains to digest production gluts from an investment boom spawned by generous subsidies in the past few years that saw producers in favored sectors, including steel, expand rapidly with little regard to real market demand.

To gradually solve the problem, a ban of new projects in steel, cement, electrolytic aluminum, flat glass and shipbuilding industries before 2017, and a gradually elimination of existing substandard projects are underway.

Source - Xinhua

voda 1 juli 2014 16:26

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Chinese industrie toont tekenen van verbetering

BEIJING (Dow Jones)--De activiteit in de Chinese industrie is in juni verder gegroeid, blijkt uit twee dinsdag vrijgegeven maatstaven, een signaal dat de stimuleringsmaatregelen van de overheid de economie nieuw leven inblazen.

De twee cijfers volgen op een verbetering van de export, industriele productie en detailhandelsverkopen, die de afgelopen weken al bekend werden gemaakt. Sommige economen zien in de aantrekkende macro-data een signaal dat de Chinese regering - in ieder geval voor even - de afnemende groei een halt heeft toegeroepen.

"De groeimomentum trekt aan", zei econoom Li-Gang Liu, econoom van ANZ. "Premier Li Keqiang beloofde onlangs dat de overheid het groeidoel van 7,5% dit jaar zal waarmaken, een indicatie dat het beleid in de tweede helft van het jaar nog ondersteunender zal zijn."

Dinsdag bleek dat de officiele inkoopmanagersindex voor de Chinese industrie vorige maand is gestegen tot 51,0 van 50,8 in mei. Ondersteund door een toename van de nieuwe orders en de export bereikte de index daarmee het hoogste niveau in zes maanden. Een meting boven de 50 wijst op groei van de sector.

De inkoopmanagersindex van HSBC liep eveneens op, tot 50,7 van 49,4 in mei. De officieuze index van HSBC kwam daarmee voor het eerst dit jaar boven de 50.

De nadruk bij de officiele inkoopmanagersindex ligt op grotere staatsbedrijven, waar de index van HSBC meer kijkt naar kleinere, private ondernemingen.

Hoewel de data van dinsdag een verbetering aantonen van de omstandigheden in de industrie moet nog blijken of die groot genoeg is om de moeizame ontwikkelingen op de vastgoedmarkt het hoofd te bieden. Maandag bleek bijvoorbeeld dat de huizenprijzen voor de tweede maand op rij zijn gedaald.

Door Mark Magnier, vertaald en bewerkt door Ben Zwirs; Dow Jones Nieuwsdienst; +31 20 571 52 00; ben.zwirs@wsj.com

voda 1 juli 2014 16:56

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Iron ore miners feast in last 10 days to be short lived under supply deluge

Current change in trajectory in iron ore market has brought a sigh of relief to the miners. Market expectedly rallied from USD 90 per tonne levels to gain 6%. Current price level for Fe 63.5/63% is USD 95 per tonne. Gaining USD 5 per tonne within 10 days seems encouraging in the backdrop of abysmal condition before.

Unviability of domestic iron ore supply had forced Chinese mines to close thereby making it imperative for the Chinese mills to import. Moreover blistering production of steel in recent months in China has kept the import moving at smooth pace culminating in stock of 115 million tonne. May steel production was 70.4 million tonne YoY 2.6 % growth and the pace remains unabated in June touching daily steel production of 1.8326 million tonnes per day.

However the current sparkle is likely fade away soon owing to the following reasons

Firstly, this could turn out to be an unrealistic rally. The industry is facing a flood of new iron ore supply from the likes of BHP Billiton Limited. BHP is on track to raise its total annual production to 260-270 million tonnes, up from a planned 217 million tonnes in 2014. It is massively ramping up production volumes. This supply could mean prices remain subdued. Please refer to our earlier article published on June 12th 2014 “Iron ore miners stare at uncertainty as capacity outnumbers demand globally”

Secondly, this time really could be different! While past drops have been met with corresponding rallies, this time around China’s demand for steel really may be waning. Reports of a huge overbuild of housing in China have been doing the rounds for years. With construction a key end user of iron ore, the effect of a housing slowdown could have serious repercussions.

Thirdly, the Bureau of Resources and Energy Economics recently released its 2015 iron ore price forecast which was for an average price of USD 97 per tonne. Compared with prior year averages this will seriously dent profits for miners.

Source – Strategic Research Institute

voda 1 juli 2014 16:57

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European steel market remains tepid owing holidays and low Chinese offers

Steel market in Europe remained stagnant last week with general price trend edging down.

All products have lost some ground in term of prices during last 15 days except scrap that is remaining, mainly in Turley, basically at the same level.

Low activity also because ongoing holiday period in some countries such as Germany and North of Europe and expected (end July to end of Aug) in some other such as Italy and Spain.

HRC prices are still keeping some position only because the good situation of the Russian domestic market together with the Iranian one are absorbing majority of the local production avoiding pressure on export.

De-bars price is falling because of coming Ramadan with major buyers of North Africa already well furnished.

Wire rod also in difficulty with even worst perspectives as USA have now decided to sustain Ukrainian de-bar and wire rod export i. o. the Turkish one to protect their strategic position.

HRP demand is declining as well as the price under the pressure of Chinese offers coming at around USD 560 to 570 per tonne CFRFO basis.

Source – Strategic Research Institute

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