International steel market continues to decline

Release time：May 16, 2019 From：admin

The international steel market in early May continued to decline. As of the reporting period, the global steel benchmark price index of 116.1 points fell by 0.5% on a week-on-week basis (expected decline), down 0.4% month-on-month (from ups and downs), down 6.9% month-on-month ( The decline was widening, down 6.2% year-on-year. Among them: flat steel index of 107.6 points, down 0.5% on a week-on-week (expanded increase); long product index of 126.1 points, down 0.5% on a week-on-week (expanded increase); Asia index 120.4 points, down 0.4% on a week-on-week (expanded increase). The China index in Asia was 122.9 points, down 0.6% on a week-on-week basis (the decline was widening); the Americas index was 137.1 points, down 0.7% on a week-on-week basis (from ups and downs); the European index was 95.1 points, down 0.6% on a week-on-week basis. Combined with the fundamentals forecast, the international steel market in the second half of May may continue to be weak.

ArcelorMittal plans to reduce European steel production. ArcelorMittal announced on May 6 that it plans to suspend its steelmaking facilities in Krakow, Poland, and to reduce the production of steel mills in Asturias, Spain. In addition, in line with the management policy of cost and quality prior to production, the production plan of ArcelorMittal Italy's original production of 6 million tons of crude steel production will also be suspended. Geert van Poelvoorde, CEO of ArcelorMittal Europe, said that these measures will result in a temporary reduction of annual production of 3 million tons of steel in the European region. Temporary reduction of production in Europe is a difficult decision, but not a hasty For it.

Tata plans to transfer all crude steel production to India. Tata Steel's CEO and Managing Director said in the first-quarter results report that Tata Steel will continue to expand its business in India in terms of volume, downstream capabilities and product mix, divesting its Asian operations and with Thyssen, Germany. After the European flat steel business of the joint venture plan, India's 2025 capacity target will constitute the total capacity of the entire steel manufacturer, which currently has a total capacity of 33 million tons.

The EU vetoed the ThyssenKrupp and Tata Steel merger plan. European Commission antitrust commissioner Margaret Vestag said recently that the EU officially rejected the merger plan of ThyssenKrupp and India's Tata Steel.

The Singapore Exchange plans to launch a steel contract. William Chin, head of derivatives at the Singapore Exchange (SGX), said it is working on a range of commodity derivatives, including steel, hot rolled coil and scrap, and plans to launch a steel contract in the next 12 months.

ArcelorMittal's first-quarter profit was the lowest in four years. ArcelorMittal's first-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) was $1.65 billion, the lowest since 2016.

Asian steel market: continue to adjust. The benchmark steel price index of 120.4 points in the region fell by 0.4% on a week-on-week basis (the decline was widening), which rose by 0.2% month-on-month (the increase was converging), and fell by 7.3% (decreased by a year) year-on-year, down 9% year-on-year.

In terms of flat products: market prices tend to decline. In Southeast Asia, China's steel export market was weak after May Day. Some export traders said that the export prices of China's long products, plates and coated products are not superior to those of other countries . The export price of thin gauge galvanizedcoils is even higher than that of Japan. The export price of sheet metal is 20-high higher than the export price of India. 30 US dollars / ton. Ukrainian hot coil export offers to Southeast Asia for only $515/tonne (CFR, Southeast Asia), while China's hot coil export offer is $525 (FOB), which means that China's export price is $20-25/ton higher than Ukraine's. As of May 10, the ASEAN hot coil import price of 534 US dollars / ton (CFR), roughly the same as last month. China's SS400B 3-12mm hot rolled coil exports average price of 525 US dollars / ton (FOB), down 15 US dollars / ton. The average export price of SPCC 1.0mm cold-rolled coils was 575 yuan / ton, down 15 US dollars / ton. The DX51D+Z 1.0mm galvanized coil exports were $625/tonne (FOB), down $10/ton.

In terms of long products: market prices fluctuate weakly. In Southeast Asia, China's steel export market is weakening. Some export traders said that almost all steel export prices in China have no advantage over other countries. For example, Turkish rebar export prices are $30/ton lower than Chinese export prices. According to the trader, the current monthly export volume is around 15,000 tons, a decrease of about 40% year-on-year. In Taiwan, Fengxing Steel disclosed that the purchase price of the first and second mixed heavy melting scrap (80:20) on the island was still maintained at 8,800 Taiwan dollars/ton (284.5 US dollars/metric ton). The cost of going to its Taichung steel mill was basically the same as last week. Based on this, the current list price of the standard specification rebarEXW table with a diameter of 12-32mm is still maintained at NT$16,300/tonne, which is the same as last week. As of May 10, the average export price of China's B500 12-25mm rebar was 520 US dollars / ton (FOB), down 15 US dollars / ton.

In terms of trade relations: Malaysia’s Ministry of International Trade and Industry stated that they have revised their anti-dumping duties on alloys and non-alloy CRC imported from China, South Korea and Vietnam. Among them, Chinese steel producers and exporters such as Bengang Steel Plate Co., Ltd., Benxi Steel Pohang Cold Rolled Sheet Co., Ltd. and Shagang International Trade Co., Ltd. will face a tariff of 35.89%-42.08%.

Short test: Based on the fundamentals of the Asian and Chinese markets, the Asian steel market in the second half of May is forecast to continue its downward trend.

European steel market: continue to be weak. The steel benchmark price index of 95.1 points in the region fell by 0.6% on a week-on-week basis (the decline was widening), which was down 1.5% month-on-month (the decline was converging), with a year-on-year decline of 11.2% (a concession) and a year-on-year decline of 12.6%.

Flat material: market prices continue to decline. In the European Union, the price of hot rolled coils was $532/ton, down $13/ton from the previous one. The cold rolled coil is priced at US$633/ton ex-works, down US$12/ton. As of May 10, the import price of hot-rolled coils in the EU was US$526/tonne (CFR), and the import price of cold-rolled coils was US$627/tonne (CFR), down by US$3-5/ton. ArcelorMittal announced that its European sheet metal mill will reduce production by 3 million tons per year. According to European industry insiders, in theory, after ArcelorMittal announced a cut in production, the ex-factory price of local steel mills should rise at least 20 euros / ton (22.39 US dollars / ton). But because the market is still in the doldrums. At present, the ex-factory price of hot-rolled European mills is still 450 Euro/ton ($504/ton), and the cold-rolled ex-factory price is 540 Euro/ton ($605/ton), which is the same as before, and even some decline. Some Spanish traders said that local steel mills are optimistic about this and will stop the previous weekly price cuts. According to market data, imported steel from Turkey is still the most competitive, but its price is above 460 euros / ton (515 US dollars / ton) (CFR Southern Europe), which is slightly higher than the European local market price. Indian steel offers are still uncompetitive, while Russian suppliers are offering some competitive offers in Antwerp. Another trader pointed out that if ArcelorMittal insists on reducing production, the price should rise. However, he pointed out that this action is likely to be a political pressure on the European Commission when the EU is about to review safeguards. In Turkey, the ex-factory price of hot-rolled coils is US$520/ton, the price of cold-rolled coils is US$590/ton, and the price of galvanized sheet is US$670/ton, which is the same as before.

For long products: market prices fell slightly. In the European Union, rebar prices were $588/tonne, down $12/ton from the previous one. Rebar imports cost $537/tonne (CFR), down $3/ton. The wire mesh is 565 US dollars / ton (CFR), which is the same as before. In Turkey, long product export prices fell further due to stagnant demand in its main target market. According to market sources, Turkish steel producers have lowered their FOB price for rebar to $5/tonne to $470-480/ton, while buyers' inquiries are at $460/ton or even lower. As of May 10, the Turkish FOB reference price of export rebar was 460-470 US dollars / ton, a slight decrease compared with the price of 470-475 US dollars / ton at the beginning of the month. Some Turkish analysts said that Turkey's long product exports have been declining this year. If this situation is not improved, the decline in export prices will increase. Turkish wire exports are exactly the same as rebar, and wire export demand has been relatively limited in the past seven days. At present, the Turkish FOB reference price of export wire rod is 500-505 US dollars / ton, lower than the previous 505-510 US dollars / ton. In addition, long process longs producer Kardmir said that after the investment plan is announced at the end of this year, its total production capacity will reach 3 million tons. In addition, the company also said that they recently shifted their investment focus to processed products, and plans to build a new blast furnace next year, with an estimated annual production capacity of 3.5 million tons and wire types from 39 to 73. In the UK, international steel trade giant Steinco said that the company is cautiously optimistic about the further strengthening of steel prices as the major regional markets enter the peak construction period. Stemcor CEO Steve Graf said that the main reason for the cautious optimism of the steel market in the second quarter is that the main market has entered the peak construction period, and the central bank is expected to stop raising interest rates in the future. Therefore, we will not be surprised if we see global steel prices rise in the second half of 2019. He added that steel consumers are cautious about the market, mainly influenced by geopolitics, macroeconomics and current global protection measures for steel products. European long product prices should strengthen at the end of the third quarter, because at this time the EU Import quotas for safeguards will be exhausted, and end users and distributors will have to make replenishment. The EU's new annual quota for Turkish rebar and wire rods will take effect on July 1, 2019. Since the products from Turkey are very popular in Europe, the quota is expected to be exhausted within one month. This may result in end users having to purchase long products from local European mills, and of course because imports are restricted, and European local mills may use this to raise prices.

In terms of trade relations: (1) On May 3, the European Commission issued a notice stating that the anti-dumping and countervailing sunset review of organic coated steel products originating in China was finalized and decided to extend the double-reaction measures against the products involved. The anti-dumping tax rate of Chinese enterprises involved was 0~26.1%, and the countervailing duty rate was 13.7%~44.7%. (2) On May 7, Turkey announced through official gazette that it officially terminated a survey on the impact of imported steel on domestic steel manufacturing. . After issuing the findings of the investigation, Turkey will not impose additional tariffs or take other measures.

Brief test: According to the operational situation combined with the fundamental situation, the European steel market in the second half of May may continue to decline.

American steel market: continue to decline. The 137.1 point steel benchmark price index in the region fell by 0.7% (from ups and downs) in the week, down 0.8% month-on-month (expanded), and fell 2% (from rising to falling), up 10% year-on-year.

In terms of flat products: market prices are mainly down. In the United States, the hot rolled coil is priced at $710/ton ex-works, down $30/ton from the previous one. The cold rolled coil has a factory price of US$855/ton, down by US$45/ton. The standard thick plate ex-factory price is $1030/ton, which is the same as before. As of May 10, the US hot rolled coil import price of 706 US dollars / ton (CIF), down 14 US dollars / ton. The price of cold rolled coil imports was US$849/tonne (CIF), an increase of US$9/ton. The standard thick plate import price is 915 US dollars / ton (CIF), an increase of 15 US dollars / ton.

In terms of long products: market prices continue to decline. In the United States, the ex-factory price of rebar is $750/ton, which is $10/ton lower than before. The import price of rebar is 750 yuan / ton (cif), down 16 US dollars / ton. Net wire 761 US dollars / ton (cif), unchanged from the previous. Small section steel 810 US dollars / ton (cif), down 17 US dollars / ton. In Brazil, steel producer CSN recently announced a profit of R$87 million ($22 million) in the first quarter of this year, much lower than the R$1.5 billion in the same period last year.

Jane test: According to the operating situation combined with the fundamental situation, the steel market in the second half of May may continue to decline.