JULY 2010

COMPARISON OF TRANSACTION PRICES ($US/tonne)

HR Coil HR Plate CR Coil HD Galv W Rod M Sect R Bar M Bar

Russia Low: 652 617 726 851 572 745 552 562

Ukraine Low: 578 618 739 919 611 760 554 650

Turkey Low: 600 650 700 780 520 630 520 545

India Low: 641 688 716 748 545 609 545 598

UAE* Low: 590 650 690 780 540 650 540 590

South Africa Low: 699 791 768 803 703 901 656 736

Brazil Low: 1010 - 1122 1374 1122 1150 1150 1066

Mexico Low: 720 766 835 881 689 727 689 727

D. Markets’ Avg. Low: 686 683 787 892 663 772 651 684

MONTH on MONTH % CHANGE

Russia Low: 0.2 -0.5 -1.0 -0.2 -2.4 0.0 -4.2 -2.8

Ukraine Low: -1.9 -3.4 -0.3 0.3 -14.9 0.1 -15.7 -0.3

Turkey Low: -1.6 0.0 -5.4 -2.5 2.0 -6.7 4.0 1.9

India Low: -5.6 -1.1 -3.9 -1.1 -3.4 -1.3 -2.3 -1.8

UAE Low: -1.7 0.0 0.7 -4.3 -10.0 -4.4 -1.8 -3.3

South Africa Low: -12.0 -16.6 -8.4 -10.6 -5.8 2.9 -13.6 -18.8

Brazil Low: -1.7 - 1.3 1.2 3.3 3.2 3.2 3.3

Mexico Low: -9.4 4.1 -4.7 3.3 -1.3 -1.2 -1.3 -3.3

D. Markets’ Avg. Low: -4.4 -3.3 -2.6 -1.6 -3.7 -0.5 -3.8 -3.5

*Import prices
ISSN 1759-3352

MEPS (INTERNATIONAL) LTD Copyright © 2010 by MEPS. All rights reserved

263 Glossop Road, Sheffield S10 2GZ, England No information contained in this report may be
Annual Subscription used or reproduced in any manner whatsoever
Rate 2010:
Tel: (0114) 275 0570 Fax: (0114) 275 9808
E-mail: subs@meps.co.uk Web Site: http://www.meps.co.uk without written permission from the publisher.
UK - £1085
NON UK - £1100
Photocopying, faxing or forwarding by e-mail to a third party is strictly prohibited without the permission of MEPS (International) Ltd.
 s

s
2 Copyright © 2010

p
e

e
ep me
MARKET HIGHLIGHTS

s
sm

sm m
In the Russian Federation, domestic metallurgical Market sentiment in the United Arab Emirates is

ep
producers have been confronted with difficult decisions,
such as how to deal with the inflow of low-cost Ukrainian
imports and the problem of raw materials costs remaining
at high levels. The latter is hindering the ability of Evraz,
ps
unlikely to rebound until September. Both domestic
and import quotes for long products remain under
pressure. With Ramadan fast approaching, traders
and service centres have begun to adopt contingency

s m s m s m ps
Severstal, NLMK and MMK to compete with Ukraine’s plans. Orders for imported material are virtually zero.
ArcelorMittal Krivoy Rog (AMKR). An escalation in price Several market participants have booked steel for

m
competition is unlikely to facilitate an improvement in
sales volumes. Faced with the prospect of losses,
Russian traders are continuing to destock.
e
delivery at a later date. Domestic producers have tried
to stimulate buyer interest with lower ex-works offers
for wire rod and reinforcing bar. Low cost imports remain

e
Deteriorating sales volumes have finally forced Ukraine’s
a problem.

s
steel industry to lower its ex-works prices. The differential South Africa's Competition Commission has started a
sm m

between domestic and export figures has narrowed but "preliminary" investigation into a decision by ArcelorMittal

s
it remains a controversial topic for end-users. Local South Africa (AMSA), to impose a surcharge on its steel
traders have adopted a similar strategy to their Russian products. The steelmaker has reiterated that it does not
counterparts. The majority are now selling inventory at believe that the Sishen surcharge contravenes the

ep
below cost to minimise future losses. country’s Competition Act. The controversial extra has
ps

been reduced by R188 to R525 per tonne, owing to a

Challenging trading conditions have persisted in Turkey. modest decrease in international iron ore prices. AMSA
ep

Buying activity is traditionally dull in the run up to the is believed to be reviewing the levy after reaching an
Ramadan festival. Several domestic producers have interim price agreement with Kumba Iron Ore over its

m
reduced output and brought forward scheduled annual supply of iron ore from Sishen Mine (SIOC).
maintenance work. However, rising production costs have
left many long product steelmakers in a difficult position. Brazilian steel quotations have retreated to June levels.
Attention has focused on the purchasing prices for various Domestic flat product producers had planned to issue
ep

grades of ferrous scrap and billet. Ex-works selling figures price increases in the range of 10 to 12 percent. These
s
for several construction steels have been raised. Domestic
bookings for flat products have remained at a low level.
adjustments were abandoned. The industry is now
considering lowering offers to stimulate buyer interest.
ep
Erdemir has responded with lower basis values. Price Distributors are unlikely to resume significant bookings

s
competition in the hot rolled coil segment has risen since due to excessive stocks. The government failed to either
Colakoglu and Tosyali Holding began commercial production. cancel or lower its import duties. Long product prices
m

ep were largely unchanged in July. Proposed price increases

ep

Overcapacity and the arrival of the monsoon season have
affected Indian steelmakers. Higher inputs costs are
squeezing margins. Flat product mills have denied that
they will reduce domestic offers. End-users fear that Tata,
ps
by ArcelorMittal, Gerdau and Votorantim were not
accepted by end-users.
Market sentiment in Mexico has weakened in July.

m
Essar and JSW may actually raise their quotes for some Purchasing activity was softer than anticipated. High
m

forms of steel. A price increase would be contentious
since purchasing activity is not expected to improve until
late August. Demand for construction steel has dropped
considerably since late June. The arrival of heavy monsoon
e
ep
inventory levels have forced local steelmakers and
distributors to ease their price demands for several steel
products. The long product segments are expected to
benefit from reconstruction work. The damage from the

rains has exacerbated the extent of the drop. Re-rollers “Hurricane season” has been particularly severe this year.
have responded with capacity cuts. Sellers have High on the priority list will be the repairing of the country’s
m

continued to offer generous discounts and rebate terms. infrastructure network.

ep

s
FLAT PRODUCTS
m

ep
ps

HOT ROLLED COIL Kazakhstan and Ukraine has been actively traded at 5
to 6 percent below the coil figures offered by Russian
Russian metallurgical companies have deferred finalising producers. Magnitogorsk Iron and Steel Work’s (MMK)
ps

their pricing positions for August. Material from effective quotations for July have declined by RUB1,300
m

Developing Markets’ Copyright © 2010 by MEPS. No information contained in this report may be used or July 2010
Steel Review reproduced in any manner whatsoever without written permission from the publisher.
 s

s
3 Copyright © 2010

p
per tonne compared to last month. ArcelorMittal figures
e

e
ep me
INDIA FLAT PRODUCTS
are RUB200/700 lower than MMK’s offerings. In contrast,

s
Transaction Prices, Rs/tonne
Severstal has persisted with its universal flat rate pricing
sm
50000

sm m
rule. The mill’s offer was left unchanged at RUB21,500

ep
per tonne FCA Cherepovets.
45000

Challenging domestic trading conditions have left Russian

40000
mills heavily dependent on their export markets. More
ps

s m s m s m ps
focus is being paid to preventing export prices from
deteriorating any further. Offers to South East Asia and 35000

m
Egypt have fallen to $US580/590 per tonne CFR and
$US620 per tonne CFR, respectively. 30000
e

e
Price competition in the Ukrainian market has risen since
late June. The latest catalyst was a $US40 price reduction
25000

s
by Kazakh’s ArcelorMittal Termirtau. Domestic producers 20000
sm m

Ilyich and Donetsk have responded with cuts of UAH250/ 7/08 11/08 3/09 7/09 11/09 3/10 7/10

s
500. Dull sales volumes in long-established overseas HR Coil HR Plate
markets have forced exporters to lower their offers by up
CR Coil HD Galvanised
to $US40.

ep
ps

Effective prices in Turkey have continued to decline.

Presently, end-users are unwilling to book material with (NLMK) and Severstal figures were in the region of
ep

Ramadan fast approaching. Inventory levels are slowly $US560/575 per tonne.
decreasing. Several traders are hopeful that this will

m
facilitate a rebound in booking activity. August is expected
to be a quiet trading month. Erdemir and Isdemir are
currently producing material on an order basis. MEPS
understands that both mills have lowered their July basis
ep
In India, shipments to tube fabricators have remained dull
due to weak export sales volumes and stagnant domestic
demand. The Ministry of Steel has controversially
recommended that hot rolled coil be placed on a

offers to $US605/610. The latest price reduction has restrictive import list. The guidance was issued after the
s
coincided with the entry of Colakoglu and Tosyali Holding
into the market. These two steelmakers recently
latest import figures were published. If approved, the
domestic steel industry would gain a degree of protection.
ep
commenced commercial production of hot rolled coil. This would be linked to the coil's end use. Buyers and

s
secondary producers are understood to be against any
European dealers have cut ex-EU offers to Turkey by restriction. CIS suppliers have offered coil for re-rolling at
m

ep
€30 to €400/450 per tonne CFR ($US500/565). This
ep

$US590/610 per tonne CFR (excluding import duty).

material is exempt from import duty. Ukrainian
producers Ilyich and Zaporizhstal have quoted coil at
$US510/530 per tonne and $US525/535 per tonne FOB
Black Sea, respectively. Russia’s MMK, Novolipetsk
ps
Domestic material may rise in August. All the majors are
considering passing on the latest price hike introduced
by the iron ore companies. State-owned NMDC Ltd has
raised its iron ore price by Rs300/350 per tonne.

m
m

FLAT PRODUCTS TRANSACTION PRICE FORECASTS - MIDDLE EAST AVERAGE ($US/tonne)

Actual Forecast
e
ep

Based on
s

low values

6 MON
Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11
m

TH???
FOREC ???
ep

Hot-rolled Coils ??? ??? ??? ??? ???

s
AST AV
A???
ILABLE ???
m

Hot-rolled Plates ??? ??? ??? ??? ???

O
ep

N
??? SUB???
Cold-rolled Coils ??? ??? ??? ??? SCRIPT???
ps

H.D. Galv Coils ??? ??? ??? ??? ??? ???

ION
???
ps

Developing Markets’ Copyright © 2010 by MEPS. No information contained in this report may be used or July 2010
Steel Review reproduced in any manner whatsoever without written permission from the publisher.
 s

s
4 Copyright © 2010

p
Challenging trading conditions have persisted in the South from Volzhsky tube-rolling mill, the Vyksa metallurgical
e

e
ep me
African market. The profit margins of local merchants plant, shipbuilding and mechanical engineering units.

s
are presently very tight. These firms are unable to import MMK’s July offer to the North Caucasian and North-West
sm

sm m
coil at competitive rates. Highveld is tracking AMSA’s federal districts has stabilised at RUB20,800 per tonne

ep
price, albeit at a discount of 1 to 3 percent.
Brazilian steelmakers have continued to signal to the
market the need for higher prices. The industry's argument
ps
and RUB21,200 per tonne, respectively. Evraz's OAO
NTMK has reduced its domestic basis price to
RUB22,300 per tonne ($US716). Offers for customers in
Kazakhstan and Central Asia were lowered by $US30

s m s m s m ps
of escalating production costs has not been accepted. per tonne DAF.
Buyers are unwilling to concede further price increases

m
due to low cost imports, high distributor inventory levels
and weak downstream demand. Traders believe that
steelmakers will need to lower ex-works prices to facilitate
e
Inventory levels are normal in Turkey. Local traders have
been unable to obtain an ex-works plate quotation from
Erdemir. Ukraine’s Ilyich has left its export figure

e
sales. Import volumes have risen significantly in 2010 on
the back of unrealistic producer price expectations. Offers
unchanged at $US600/620 per tonne FOB Black Sea.
European dealers are offering ex-EU material from €450

s
from Asia have fallen back by $US30 to $US640/660 per per tonne CFR ($US565). This plate is exempt from import
sm m

tonne CFR Santos. duty.

s
HOT ROLLED PLATE South African merchants have struggled to sell plate in
July. AMSA and Highveld's pricing positions have been

ep
In Russia, MMK plate facilities have been operating at blamed for the inactivity. Traders have put forward the
ps

full capacity. The steelmaker is reporting strong demand view that the recent ex-work offerings were unrealistic
ep

FLAT-ROLLED PRODUCTS - TRANSACTION PRICES

m
price/tonne Russia Ukraine Turkey India UAE* S Africa Brazil Mexico
(RUB) (UAH) ($US) (Rs) ($US) (R) (R$) (MEX$)

Hot Rolled Coil High: 20430 4880 630 33500 620 5778 2000 9900
ep

Low: 20290 4641 600 30000 590 5400 1800 9400

s
Hot Rolled Plate High: 22300 5345 720 34200 670 6536 - 10555
ep
Low: 19200 4968 650 32200 650 6108 - 10000

s
Cold Rolled Coil High: 23180 6060 730 36500 720 6080 2170 11400
m

ep Low: 22600 5941 700 33500 690 5932 2000 10900

ep

Hot Dipped High: 27910 7565 820 37800 800 6340 2500 12000
Galvanised Coil Low: 26485 7380 780 35000 780 6204 2450 11500

MONTH on MONTH % CHANGE

ps

m
m

Hot Rolled Coil Low: 0.0 -2.0 -1.6 -6.0 -1.7 -11.3 -4.8 -8.3

Hot Rolled Plate Low: -0.5 -3.6 0.0 -1.5 0.0 -16.1 - 5.3

Cold Rolled Coil Low: -1.1 -0.3 -5.4 -4.3 0.7 -7.7 -2.0 -3.5
e
ep

H.D. Galv Coil Low: -0.3 0.1 -2.5 -1.4 -4.3 -9.9 -2.0 4.5
m

ep

PRODUCT DEFINITIONS
s
Hot-Rolled Wide Coil - 2-3mm thickness, width over 1.1 metres.
m

ep

Hot-Rolled Plates - 15-40mm thickness, width over 2.0 metres.

Cold-Rolled Coils - 1mm thickness, width over 1.3 metres. - except India 0.8mm thickness.
ps

Hot Dipped Galvanised Coils - 1mm thickness, width over 1.1 metres, coating thickness 275 gm/m2. - except India: 0.63-
0.8mm, Russia 1.0-1.4mm and Ukraine: 1.0-1.5mm thickness.
ps

Developing Markets’ Copyright © 2010 by MEPS. No information contained in this report may be used or July 2010
Steel Review reproduced in any manner whatsoever without written permission from the publisher.
 s

s
5 Copyright © 2010

p
Deliveries to Indian automotive suppliers have remained
e

e
ep me
CURRENCY EXCHANGE RATES
July 2 - 2010
robust. Nonetheless, several local traders are pressing

s
for a price cut. Imported cold rolled coil was sold at
sm

sm m
Units/ $US610 per tonne CFR (excluding import duty). Faced
US$

ep
with the prospect of a decline in profit margins,
Russia (RUB) 31.14 domestic steelmakers are unlikely to give into these
Ukraine (UAH) 8.034 demands. The country’s weak consumption will
Turkey (TL) 1.573
prevent the mills from raising domestic quotations
ps

s m s m s m ps
amidst rising input cost pressure. Even though Tata
India (Rs) 46.80
Steel has been publicising the need for a 10 percent

m
UAE (AED) 3.673 rise in finished product values, the producer has led
S Africa (R) 7.726 calls for major mining companies, which supply key
ingredients such as iron ore and coking coal, to act more
Brazil (R$) 1.783
e
Mexico

e (MEX$) 13.06
responsibly. In early July, spot iron ore prices stood at
$US100/115 per tonne and coking coal prices were at

s
China (RMB) 6.771 $US185 per tonne.
sm m

Eurozone (€) 0.797

s
Brazil’s CSN has brought its quotations into line with
Usiminas figures. The price adjustment has been
and have stifled trade as well as undermining buyer viewed by customers as unwarranted. Domestic

ep
sentiment. Highveld is currently selling hot rolled plate demand has weakened since June. Local producers
ps

at between 4 and 9 percent below AMSA figures. Falling are now considering lowering offers to stimulate buyer
international values have allowed service centres to interest. Distributors are unlikely to resume significant
ep

resume importing material at competitive prices. bookings. Inventory levels have risen to, on average, 3.8
months. In July, offers for cold rolled coil from Asia

m
COLD ROLLED COIL declined by $US50 to $US730/750 per tonne CFR
Santos.
In Russia, sales volumes have started to slowdown.
Domestic producers have responded to the new business HOT DIPPED GALVANISED COIL
ep

conditions with different pricing strategies. MMK has

s
lowered its coil quotations for the North Caucasian and
North-West Federal Districts by RUB700 per tonne.
In Russia, orders from the private construction sector
have fallen. The decline has been blamed on the recent
ep
Severstal has opted to continue with its flat rate pricing hot weather conditions. Steelmakers have responded

s
policy. The mill's coil quote remained unchanged at with new pricing strategies. NLMK has raised its July
RUB23,700 per tonne FCA Cherepovets. Challenging ex-works price by 2 percent. The country’s other
m

ep
overseas trading conditions have encouraged exporters galvanised producers, MMK and Severstal, have lowered
ep

to hold minimal stock levels. domestic quotations by RUB200/300.

The recent price weakness has undermined market Ukrainian end-users have begun purchasing Chinese
sentiment in the Ukraine. Local buyers have begun galvanised coil. Domestic producers are unable to
ps

m
purchasing small lots of material. The inventory levels compete on price. Local distributors have responded with
m

of trading companies are minimal. Several firms are lower ex-stock figures. In Dnepropetrovsk/Kharkiv,
reporting a shortage of 1mm and 2mm cold rolled galvanised coil was traded at UAH8,315 per tonne
material. ($US1,035) and in Kiev at UAH8,400 per tonne
($US1,046).
e
ep

Difficult trading conditions have persisted in Turkey.

Local traders do not believe that the current coil prices Secondary Indian producers Uttam Galva and Bhushan
m

are sustainable. Erdemir has lowered its price Steel are reporting difficult trading conditions. Both
ep

s
demands to $US700/720 per tonne – a reduction of steelmakers have not ruled out production cutbacks. Profit
over $US30 compared to June’s quote. European margins are tight. The industry favours rolling over July
m

dealers have been offering ex-EU material at €470/ quotations into August. However, this may not be possible
ep

500 per tonne CFR ($US590/627). This is more if domestic demand does not recover.
ps

attractive than CIS coil because it is exempt from

import duty. Ukraine’s Ilyich and Zaporizhstal export In Brazil, offers from Asia have fallen by $US50 to
offers are likely to remain unchanged at $US615/630 $US830/850 per tonne CFR Santos. Imports were last
ps

per tonne FOB Black Sea. traded at these levels in February 2010.
m

Developing Markets’ Copyright © 2010 by MEPS. No information contained in this report may be used or July 2010
Steel Review reproduced in any manner whatsoever without written permission from the publisher.
 s

s
6 Copyright © 2010

p
e

e
ep me
LONG PRODUCTS

s
sm

sm m
WIRE ROD MEDIUM SECTIONS AND BEAMS

ep
In the Russian Federation, demand for finished steel
products is expected to remain weak, especially in the
key construction sector. Producer’s price expectations
ps
The Russian market has been flooded by low-cost
Ukrainian material. Traders believe that ex-works prices
will have to fall by between 7 and 11 percent before

s m s m s m ps
have been lowered. They were too optimistic about growth. domestic producers will be able to compete. Evraz's OAO
There are concerns of price weakness ahead due to no NTMK has left its domestic basis prices unchanged at

m
clear signs of recovery. MMK’s effective quotations for
Yekaterinburg, Novosibirsk and Perm have been reduced
by RUB1,400 to RUB18,400, RUB17,200 and RUB18,200
e
RUB24,900/27,200 per tonne. The mill’s export offers to
Kazakhstan and Central Asia have been lowered to
$US635/670 per tonne DAF. Discounts are still available

e
per tonne, respectively, FCA Magnitogorsk. Evraz's JSC
ZSMK has lowered its offers for these regions to
for material acquired on pre-payment terms.

s
RUB17,600, RUB18,500 and RUB17,500 per tonne, FCA In Ukraine, sales volumes are not expected to improve
sm m

Novokuznetsk. until the end of the summer months. The majority of

procurement managers are on vacation. Distributors have

s
Challenging trading conditions persist in Turkey. Domestic left offers for Dnepropetrovsk/Kharkiv and Kiev unchanged
requirements have deteriorated faster and earlier than at UAH6,705 per tonne ($US835) and UAH6,790 per

ep
expected. Several steelmakers have brought forward tonne ($US845), respectively.
ps

scheduled annual maintenance work. The recent rise in

ex-works prices is expected to be short-lived. This Business conditions in Turkey are expected to remain
ep

increase was an automatic reaction to the higher dull through to late August. Traders and steelmakers are
purchasing cost of scrap and billet. Those in need of likely to be inactive until this point. Material priced in

m
urgent sales will continue to offer significant discounts euros has fallen by €35/40. This equates to a fall of around
and favourable payment terms. Exporters have raised 7 percent when converted into US dollars. Local
offers by $US20/25. distributors have raised ex-stock H and I beams prices
by 1.6 percent to $US716/745 per tonne.
Booking activity in the Indian market has started to be
ep

s
negatively affected by the monsoon weather. Work on
construction and infrastructure projects traditionally
Purchasing activity in the United Arab Emirates has
started to deteriorate. The price differential between the
ep
decelerates during this period. The domestic steelmakers import quotes of European and Asian suppliers is now

s
have held wire rod quotations at late June levels. negligible. It is doubtful whether prices will decline any
Discounts are available but the size is dependent on
m

ep
payment terms and order volumes. RINL is offering
ep

material for export in 3,000 tonne bundles. INDIA LONG PRODUCTS

Transaction Prices, Rs/tonne
The South African market remains fragile due to low levels 45000
of construction activity. Several traders believe that the
ps

m
country is now experiencing the “true” effects of the global
m

40000
credit crunch. Effective prices have fallen by 5 percent.
There is a school of thought that the domestic steel
industry was shielded by state-funded infrastructure 35000
expenditure and projects associated with the World Cup
e
ep

2010 tournament. On a positive note, contract business

experienced a small rebound in July. This has been 30000
m

mostly driven by private sector requirements. Orders from

ep

s
Eskom’s power station development programme have 25000
remained steady.
m

ep

Brazil’s Gerdau has alleviated fears of an impending 20000

ps

rise in its long product quotations. The steelmaker 7/08 11/08 3/09 7/09 11/09 3/10 7/10
has stated that it would postpone any price adjustments
Wire Rod Rebar Merchant Bar
until the domestic steel industry witnessed a full-fledged
ps

recovery.
m

Developing Markets’ Copyright © 2010 by MEPS. No information contained in this report may be used or July 2010
Steel Review reproduced in any manner whatsoever without written permission from the publisher.
 s

s
7 Copyright © 2010

p
further. Demand is unlikely to rebound until the end of facilitate sales. Our data contributors report that
e

e
ep me
the Ramadan festival. shipments to end-users have fallen by 80 percent.

s
Material is now being redirected for export at $US490/
sm

sm m
REINFORCING BAR 500 per tonne FOB Black Sea. This is $US10 below the

ep
price level offered by Russian producers.
In Russia, the main producers have been forced to
downgrade their price expectations. Ukraine’s AMKR and Effective prices in Turkey have regained some lost ground.
Metinvest have traded material at 6 to 7 percent below Producers have raised their offers as a result of rising
ps

s m s m s m ps
the purchase price of Russian material. MMK’s effective production costs, particularly the recent rebound in
quotations, FCA Magnitogorsk, for Yekaterinburg, ferrous scrap figures. Low demand has not deterred

m
Novosibirsk and Perm have fallen to RUB18,900,
RUB17,800 and RUB18,500 per tonne, respectively.
Evraz's JSC ZSMK has made offers to these regions in
e
producers from attempting to pass on the higher
production costs to their customers. Prices are not
expected to rise any further. Sales volumes are

e
the range of RUB17,600/18,800 per tonne FCA
Novokuznetsk. The steelmaker has lowered its quotations
traditionally soft in the summer months.

s
to Kazakhstan and Central Asia to $US540/565 per tonne Indian demand has dropped considerably since late June,
sm m

DAF. Certain grades of material remain very difficult to particularly from the construction and infrastructure

s
obtain. sectors. The arrival of heavy monsoon rains has
exacerbated the extent of the drop. Re-stocking by
Ukrainian steelmakers have found it difficult to sell traders is presently the only outlet propping up sales

ep
reinforcing bar in the domestic market. AMKR reduced volumes. The majors have been reluctant to announce
ps

its local figures by UAH700 per tonne in late June to any price changes. In the state of Punjab, several re-
ep

LONG PRODUCTS - TRANSACTION PRICES

m
price/tonne Russia Ukraine Turkey India UAE* S Africa Brazil Mexico
(RUB) (UAH) ($US) (Rs) ($US) (R) (R$) (MEX$)
ep

Wire Rod High: 20000 5200 555 28300 555 5570 2100 9400
s Low: 17800 4910 520 25500 540 5434 2000 9000

Med. Sections High: 26970 6230 670 30500 685 7124 2350 10400
ep

s
and Beams Low: 23200 6108 630 28500 650 6964 2050 9500

Reinforcing Bar High: 18300 5000 545 29700 575 5449 2300 9400
m

ep Low: 17200 4450 520 25500 540 5069 2050 9000

ep

Merchant Bar High: 20900 5400 575 31400 610 5770 2050 10000
Low: 17500 5225 545 28000 590 5688 1900 9500
ps

MONTH on MONTH % CHANGE

m
m

Wire Rod Low: -2.5 -15.0 2.0 -3.8 -10.0 -5.0 0.0 0.0

Sect. & Beams Low: 0.0 0.0 -6.7 -1.7 -4.4 3.7 0.0 0.0
e
ep

Rebar Low: -4.2 -15.8 4.0 -2.7 -1.8 -12.9 0.0 0.0
s

Merchant Bar Low: -2.8 -0.4 1.9 -2.1 -3.3 -18.1 0.0 -2.1
m

ep

s
PRODUCT DEFINITIONS
m

Wire Rod (Mesh Quality) - 8-12mm diameter.

ep

Medium Sections and Beams - 240mm x 240mm H Beam. - except Turkey: IPE-NPI (220mm-250mm)
ps

Reinforcing Bar (Deformed) - 16-20mm diameter.

Merchant Bar - 50 x 50mm x 6mm equal angle. - except Ukraine: 50 x 50 x 3-5mm and Turkey: 50 x 50 x 5mm
ps

Developing Markets’ Copyright © 2010 by MEPS. No information contained in this report may be used or July 2010
Steel Review reproduced in any manner whatsoever without written permission from the publisher.
 s

s
8 Copyright © 2010

p
rollers have opted to operate units at 50 percent of price weakness. MMK’s figures for Yekaterinburg,
e

e
ep me
installed capacity. RINL is offering 8mm to 32mm material Novosibirsk and Perm have fallen on average by

s
for export in 2,000 tonne bundles. RUB1,350 per tonne FCA Magnitogorsk. Evraz's JSC
sm

sm m
ZSMK has lowered its domestic offer by RUB1,300. The

ep
Trader activity has continued to decelerate in the United mill has reduced its basis quotation for customers in
Arab Emirates. With Ramadan approaching, merchants Kazakhstan and Central Asia to $US640 per tonne DAF.
are looking to restrict inventories to manageable levels.
Local steelworks have downgraded ex-works figures by Downward pressure has been exerted on effective prices
ps

s m s m s m ps
AED150 to AED2,150/2,200 per tonne ($US585/600). in the Ukraine. This has transpired even though there is
Imported rebar values are unlikely to deteriorate any further a shortage of material. Metallurgical plants in

m
due to the recent rebound in global ferrous scrap figures. Dneprodzerzhinsk and Alchevsk have been forced to cut
back production. Several producers have working capital
South African demand has remained weak. Cape Town problems and were unable to settle their energy bills and
e

e
Iron & Steel Works (Pty) Ltd has lowered its ex-works
price by R770 to R5,850 per tonne. AMSA has reduced
purchase raw materials.

s
its July basis offer by a similar amount. The adjustment In Turkey, re-rollers and small-medium sized steelworks
sm m

was forced upon the steelmaker. The June proposed price have reduced utilisation rates. The majority of these

s
increase was unacceptable. Clients were unhappy steelmakers will commence maintenance work in the
because it followed the introduction of the controversial next couple of weeks. Rising billet and scrap costs have
“Sishen Surcharge”. also forced these companies to raise their ex-works

ep
selling figures. Exporters are also experiencing
ps

The Brazilian market continues to be held back by soft challenging trading conditions in the Middle East and
domestic demand. Internal mills have been forced to North Africa. This is partly due to the onset of the Ramadan
ep

withdraw planned price rises. Discounts are being offered festival. Turkish shipments to North Africa have risen since
to stimulate demand. Several traders are worried that construction activity started to deteriorate in the Gulf

m
current market conditions may linger until the end of the States.
year. If this transpires, it is their view that effective prices
for construction steel will have to fall. Purchasing activity remains lacklustre in the United Arab
Emirates. With Ramadan fast approaching, traders have
ep

Market sentiment in Mexico is being undermined by price begun to adopt contingency plans. Orders for imported
s
uncertainty and high inventory levels. Local producers
have lowered their ex-works quotations. Discounts and
material are virtually zero. The trend of low prices and
weak sales volumes will continue until capital spending
ep
favourable payment terms are being offered to facilitate on building and infrastructure improves. Construction

s
sales. activity in Abu Dhabi has outshone Dubai this year.
m

ep
MERCHANT BAR Trading activity in South Africa has remained subdued.
ep

Bookings have not been strong since the start of the

Domestic quotations have been reduced in Russia. World Cup tournament. End-users welcome the recent
Pressure was exerted by low-cost Ukrainian material. 18 percent cut in ex-works prices. The majority are
Some sections of the market are now forecasting further looking for a further downward adjustment in August.
ps

m
m

LONG PRODUCTS TRANSACTION PRICE FORECASTS - MIDDLE EAST AVERAGE ($US/tonne)

Actual Forecast
e
ep

Based on
s

low values

6Jul-10
MONT Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11
m

H ???
FOREC ???
ep

s
Wire Rod ???
AST A ??? ??? ??? ???
VA???
ILABLE ???
m

Medium Sections ??? ??? ??? ??? ???

ON SU
ep

B???
SCRIP ???
ps

Rebar ??? ??? ??? ??? ???

TION
Merchant Bar ??? ??? ??? ??? ??? ??? ???
ps

Developing Markets’ Copyright © 2010 by MEPS. No information contained in this report may be used or July 2010
Steel Review reproduced in any manner whatsoever without written permission from the publisher.
 s

s
9 Copyright © 2010

p
e

e
ep me
SCRAP

s
sm

sm m
Several Russian metallurgical plants have restored their
SCRAP PRICES ($US/tonne)

ep
purchasing prices for 3A grade scrap back to mid-June
levels. The upward adjustment was made to guarantee Last This
their requirements would be fully supplied. Producers Month Month
acted swiftly once there was evidence that international
ps

s m s m s m ps
scrap markets were starting to look attractive to Russian India (EXW)*

m
collectors. Net purchasing positions in the central region - Chennai 290/305 320/330
stood at RUB7,500/8,000 per tonne. Their compatriots - Delhi 345/355 320/330
in the Urals and Siberia offered RUB7,400/7,800 per - Kolkata 310/320 320/330
tonne. Steel facilities located in the south increased their - Nhava Steva/Mundra port (CIF) 330/350 350/360
e

e
bids to RUB7,500/8,000 per tonne.

s
CIS (FOB)**
- Baltic Sea (Russia) 350/355 300/305
sm m

Turkish steelworks resumed importing ferrous scrap in

late June. This, in conjunction with the reintroduction of - Black Sea (Russia) 310/315 295/300

s
Chinese buyers, has subsequently reinvigorated global - Black Sea (Ukraine) 320/325 295/300
scrap markets. Import offers to Turkey have escalated
Turkish port (CFR) ex CIS** 330/340 325/340

ep
even though lower seasonal demand has developed. The
ps

brief procurement activity was driven by low scrap Scrap - * HMS 1&2
inventory levels. Diler Iron & Steel Industry, Habas, ICDAS ** 3A
and Yolbulan Bastug Metalurji Sanayi have acquired
ep

enough material for their August production, and are not

expected to recommence purchasing until late July at speculative bids. The upward movement in import quotes

m
the earliest. witnessed in July has made local Indian traders bullish.
HMS1&2 offers for domestically collected material have
Indian buyers are in no rush to purchase either domestic risen in the ports of Chennai and Kolkata to $US320/330
or imported material. The majority have stayed out of the per tonne. However, the effective price in Delhi has fallen
ep

market and tested the resolve of their suppliers with back towards the levels in port cities.
s
SEMI-FINISHED PRODUCTS
ep

s
m

Russian and Ukrainian producers have found it difficult

ep redirected for sale in the strongest export markets. The
ep

to sell their August production. Established customers
are still not interested in booking material. Downstream
demand for finished carbon steel products has remained
subdued. Several CIS mills have scaled back production
ps
tightening of supply has, inadvertently, handed sellers
the opportunity to propose higher export figures. Raw
material costs have risen recently. Clients have found
the new export price levels unappealing and have been

volumes of semis. The products produced are being slow to accept them. Only a small number of buyers
m
m

BLOOM PRICES ($US/tonne) SLAB PRICES ($US/tonne)

Last This Last This

e
ep

Month Month Month Month

s

India (EXW)
- Chennai 530/535 525/530 Brazil (EXW) 580/590 580/590
m

ep

- Kolkata 565/570 555/560

s
- Mumbai 530/535 525/530 CIS (FOB)
- Black Sea (CIS) 520/540 480/500
m

ep

S Africa (EXW) 750/760 770/780 - Far East (Russia) 570/580 500/510

ps

Turkey (EXW) 590/605 580/590 Asian port (CFR) ex Brazil 620/630 600/620

Bloom - 260 x 260mm Slab

ps

Developing Markets’ Copyright © 2010 by MEPS. No information contained in this report may be used or July 2010
Steel Review reproduced in any manner whatsoever without written permission from the publisher.
 s

s
10 Copyright © 2010

p
believe that the latest offerings are sustainable. Doubts
e

e
ep me
BILLET PRICES ($US/tonne)
persist over whether or not July’s production was

s
completely put up for sale. Last This
sm

sm m
Month Month

ep
Slab bookings in the South East Asia Markets have shown
little sign of recovery. Downstream demand for flat India (EXW)
products remains subdued. Asian steelworks have been - Chennai 580/585 575/580
able to use this to minimise the price demands of their - Kolkata 595/600 585/590
ps

s m s m s m ps
CIS and Brazilian slab suppliers. Quarterly contract - Mumbai 585/590 580/585
negotiations have recently been concluded. In mid-

m
month, the price of CIS slab sold on the spot market had S Africa (EXW) 635/645 650/660
remained unchanged at $US530/540 per tonne CFR major
SE Asia ports. Brazilian producers are still not prepared Turkey (EXW) 470/480 470/480
e

e
to sell slab at these levels. Instead, they have focused
on supplying the requirements of their domestic CIS (FOB)

s
customers. - Black Sea (CIS) 470/480 475/485
sm m

- Caspian Sea (Russia) 475/485 485/495

- Far East (Russia) 500/510 505/515

s
Billet booking activity in the Indian market has slowed.
Due to the onset of the heavy monsoon rains, the majority
UAE port (CFR) ex Turkey/Russia 500/515 520/535
of re-rollers have cut back production. Integrated

ep
producers have introduced similar measures. Profit Billet - 125 x 125mm, 150 x 150mm
ps

margins are very tight. The cost of billet and other semis
have not fallen as fast as finished product values. Domestic
ep

billet utilisation rates are expected to recover from (SAIL) have rolled over their June ex-works prices. Both
September onwards. State-owned steelmakers Rashtriya producers have continued to offer concessions and more

m
Ispat Nigam Ltd (RINL) and Steel Authority of India Ltd generous rebates to facilitate sales.

MARKET AND INDUSTRY ISSUES

ep

s
Mechel Service Global (MSG), a subsidiary of Russia’s
Mechel, has acquired a 100 percent controlling interest
scheduled to start in 2013.
ep
in Ramateks, the Turkish steel service centre, for $US3 Brazilian miner Vale and ThyssenKrupp have

s
million. Ramateks sells construction and stainless steel commissioned their slab mill, Companhia Siderúrgica do
long products. Atlântico (CSA) in Rio de Janeiro state. The facility has
m

ep an annual capacity of 5 million tonnes. Its output will be

ep

Brazil’s Votorantim is expected to start preparation work
on the site of its reinforcing bar mill in Mato Grosso do
Sul state. The facility will initially have an annual capacity
of 200,000 per tonne.
ps
exported to ThyssenKrupp’s US and European facilities.
Ukraine’s Unistil has begun commercial production at
its new galvanising line. The Kryviy Rih facility has an

m
annual capacity of 100,000 tonnes. The producer plans
m

ArcelorMittal and India’s Uttam Galva have announced to incrementally build up its production capacity.
plans to set up a joint venture in Sindhudurg, Maharashtra.
The hot rolled coil mill will have an annual capacity of 1.5 Brazilian miner Vale has started construction of its slab
million tonnes. The total cost of the project is estimated project Aços Laminados do Pará (Alpa) in Pará state. It
e
ep

at Rs6,000 cores. will have an annual slab capacity of 2.5 million tonnes.
The facility is scheduled to be commissioned in 2013.
m

India’s NMDC Ltd and Japan’s Nippon Steel are in

ep

s
discussions over establishing a joint venture in the state Ukraine’s Metals & Polymers is scheduled to commission
of Karnataka. The integrated steel mill would have an a new galvanising line in August. The Alchevsk facility
m

annual capacity of 2 million tonnes. will have an annual capacity of 100,000 tonne.
ep
ps

Saudi Arabia’s Atoun Steel has revealed plans to construct Steel Authority of India Ltd (SAIL) has announced that it
a new steel mill in Yanbu Industrical city. The facility will is in discussion to acquire a 50 percent stake in the
have an annual capacity of 900,000 per tonne. billet producer, Steel Complex Ltd (SCL), from the Kerala
ps

Commercial production of reinforcing bar and billet is state government.

m

Developing Markets’ Copyright © 2010 by MEPS. No information contained in this report may be used or July 2010
Steel Review reproduced in any manner whatsoever without written permission from the publisher.
 s

s
11 Copyright © 2010

p
e

e
ep me
REGIONAL AVERAGE TRANSACTION PRICES ($US/tonne)

s
sm

sm m
D. MARKETS’ E.U. N. AMERICA ASIA CHINA

ep
Last This Last This Last This Last This Last This
Month Month Month Month Month Month Month Month Month Month
HR Coils :High 773 732 802 792 802 736 703 685 548 515
:Low 718 686 749 738 725 684 664 650 526 495
ps

s m s m s m ps
HR Plates :High 761 737 903 875 957 900 759 763 567 543

m
:Low 706 683 861 831 888 844 701 706 545 523

CR Coils :High 852 826 894 892 899 875 845 819 700 641
:Low 808 787 839 837 812 750 795 780 671 614
e
HD Galv.

e :High 965 926 969 970 1013 982 932 930 646 619

s
Coils :Low 906 892 912 911 935 896 879 876 619 594
sm m

Wire Rod :High 735 703 707 598 790 770 698 671 428 393

s
:Low 689 663 678 570 710 704 640 634 410 378

M. Sect. :High 834 836 900 881 866 853 756 732 521 501

ep
& Beams :Low 775 772 845 824 806 795 710 698 501 480
ps

Rebars :High 739 710 674 577 700 687 633 602 496 450
:Low 677 651 647 550 648 642 601 571 476 431
ep

Merc. Bars :High 758 733 769 758 869 855 720 702 511 490

m
:Low 709 684 729 716 829 817 688 665 490 470

The Developing Markets’ prices are an arithmetic average of the low transaction values identified in the eight countries published in this report -
collected in national currencies and converted into US dollars using currency exchange rates effective at the start of each month to provide a basis for
comparison. EU average prices are computed from a weighted average (based on consumption) of the low values identified in Germany, France, Italy,
ep

UK and Spain. North American average prices are computed from a weighted average of the low prices identified in USA and Canada. Asian average
s
prices are derived from an arithmetic average of the low transaction values identified in Japan, Taiwan, South Korea and China. Individual product price
forecasts are available. Please visit http://www.meps.co.uk/world-price.htm.
ep

s
The August issue of the MEPS DEVELOPING MARKETS’ STEEL REVIEW will be dispatched on 25 August, 2010.
m

ep
ep

PRICE DEFINITIONS
The transaction prices in this publication relate to those agreed by steelmakers and service centres for prime material in the specified products
defined in the relevant tables. The prices are for regular business transactions between customers and their local steel mills, negotiated during
the current month for delivery in the future. United Arab Emirates is an exception to this rule. *These values are import prices cfr, local port.
ps

The transaction prices include all extras for the lowest priced grade of steel in the selected product form - sold ex mill.
m
m

Delivery charges and local taxes are not included in the quoted prices. Long term contract deals arranged in the domestic market, or agreements
for lots of imported steel, are specifically excluded from our price evaluation.

All price and market data is researched by MEPS staff and its local correspondents. High and low values are provided to reflect the range of prices
e
ep

in the market between major and minor customers. Research is conducted during the early weeks of each month. Changes in the latter part of
s

the month would be incorporated in the next issue.

m

Please note the transaction references in the different geographic areas:-

ep

s
Russia - Flat Products - Volga region
Russia - Long Products - Volga & North Caucasus
m

Ukraine - Long Products - Dnepropetrovsk

ep

India - Flat Products - Delhi

India - Long Products - Mumbai
ps

The data contained in this newsletter has been obtained from respondents who we consider provide accurate intelligence on the steel market.
We make our best endeavours to be assured that the information is correct and that our analysis is reliable. MEPS (International) Ltd. cannot
ps

be made liable for any loss resulting from use of our published data, however it may arise.
m

Developing Markets’ Copyright © 2010 by MEPS. No information contained in this report may be used or July 2010
Steel Review reproduced in any manner whatsoever without written permission from the publisher.
 s

s
12 Copyright © 2010

p
e

e
ep me
MEPS REGULAR PUBLICATIONS

s
sm

sm m
EUROPEAN STEEL REVIEW (monthly) EUROPEAN STEEL REVIEW SUPPLEMENT

ep
(monthly)
This is our flagship
publication. The first report A sister publication to the
was produced in 1984. Each European Steel Review. The
ps

s m s m s m ps
monthly issue incorporates range of data is extended in
high and low market prices

m
this report. Price and market
for eleven steel product information is supplied for a
forms in the EU - Germany, further six nations, including
France, Italy, Spain, UK and - Denmark, Sweden,
Belgium. Data for flat and Finland, Holland, Austria
e

e
long products is supplied in
each edition. Prices are
and Norway. Euro
comparisons are also

s
displayed in Euros for easy included. Details of Nordic
comparison. Details of EU
sm m

Average Steel Transaction

Average Steel Transaction Prices are incorporated
Prices are incorporated together with regular

s
together with regular forecasts.
forecasts.

ep
ps

STAINLESS STEEL REVIEW (monthly)

INTERNATIONAL STEEL REVIEW (monthly)
This publication provides
ep

Each edition carries stainless steel price and

domestic steel pricing data market information for hot

m
in eleven countries across rolled plate, hot and cold rolled
the globe, including - United strip, plus two bar products.
States, Canada, China, Two austenitic and ferritic
Japan, South Korea, grades are assessed in
Taiwan, Poland, Czech/ thirteen countries around the
Slovak Republics and the world covering 65% of global
ep

s
main five EU member
states - covering 70 percent
of world consumption.
consumption. Details of basis
price negotiations and alloy
surcharge values, where
applicable, are incorporated.
ep
Details of World and

s
Regional Average Steel Transaction price forecasts
Prices are incorporated are included. Estimates of
together with regular alloy surcharges three months
m

ep
forecasts. ahead are also included in
ep

each issue.

ORDER FORM - MONTHLY PUBLICATIONS

ps

I wish to subscribe to the following publication(s).

m
m

European Steel Review European Steel Review Supplement

International Steel Review Developing Markets’ Steel Review
Multi-subscription discount rates available. Please contact our office or visit our website for furthur details.
Please send to: Please Invoice:
e
ep

NAME NAME
POSITION POSITION
m

COMPANY COMPANY
ep

ADDRESS
s
ADDRESS
m

ep

Tel No:
ps

Tel No:
Fax No: Fax No:
E-mail: E-mail:
ps

YOUR VAT NUMBER (EU COUNTRIES ONLY)

m

Developing Markets’ Copyright © 2010 by MEPS. No information contained in this report may be used or July 2010
Steel Review reproduced in any manner whatsoever without written permission from the publisher.