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2015-10-09
By Admin

Steel News-October 2015

Based on reported import licenses, US flat products imports fell 8% from 1,096,000 short tons in August to 1,006,000 tons in September. Flat products imports in September 2014 were 1,387,000 tons and in September 2013 they were 816,000 tons. Imports of flat products over the first 9 months of 2015 were 5% higher than in the same period last year, with cut plate imports rising 1%, hot roll imports up 2%, cold roll imports up 7% and hot dip galvanized imports up 13%.
 
The drop in flat products imports in September was driven by lower hot roll imports where volumes fell significantly from Brazil, but also from Canada, Australia, Japan and Mexico. Hot dip galvanized imports also declined, here mainly from China, India and South Africa, and despite a rise from Korea and Italy. In contrast, cut plate imports rose significantly on higher volumes from Germany and France.
 
I will update the chart below to show mid-October licenses when the figures are published the week of October 19th.
 
 
by JESSICA WAGNER on OCTOBER 7, 2015. Courtesy :nerdsofsteel.com
2015-07-25
By Admin

Steel News - September 2015

Indian government has recently announced import duty hike of 20 % for flat steel products and is certainly a welcome move as far as Indian industry is concerned.
 
India is an original signatory of WTO and has accepted globalised and liberal economic model way back in 1991. Accordingly, the import duties on various products including iron & steel were reduced gradually and overseas products were allowed to tap Indian markets. Also, barring few strategic sectors, other sectors were allowed to raise foreign equity. The result of this policy was that Indian markets were flooded with overseas products and international companies. The thought process behind this was to expose Indian products and companies to the global competition and raise the quality of domestic products. We have seen in last around 25 years that this objective was partially achieved. Liberalization and globalization also encouraged private entrepreneurship and today, as in many other sectors, iron & steel industry is dominated by private players. In a timeline graph, the bars of capacity creation and consumption compete against each other and thus sometimes there is overcapacity with depressed demand and price and sometimes the situation is exactly reverse.
 
As on now, the domestic demand seems to be stagnated. Steel companies are struggling for want of raw materials at reasonable price. This is certainly not the time market should be asked to absorb the overproduction of some other country. This may give some price advantage to steel users but will inturn completely destroy the domestic steel producing industry. The situation world over is similar and I expect such measures will be taken by many countries in near future.
 
This duty cushioning is only for flat steel products but long products industry is in equally deep trouble. Apart from wire rods and a small quantity of bars, there are not much imports in long sector but iron ore pricing itself is making the whole process unviable. Midsized and mini steel industry producing longs has strongly demanded reduction in iron ore prices and NMDC has responded positively. This will surely give some relief to sponge iron producers and will induce some viability in the whole process chain. The real trigger to steel demand will come from the mega infrastructure projects and the iron & steel industry is desperately waiting for the same !!!
 
Posted in D.A.Chandekar's Views
2015-10-09
By Admin

Steel News- August 2015

Many financial experts argue that global economy is in a very bad shape and is about to witness a great depression in coming months. The recent Yuan devaluation and subsequent fall in share markets all over the world do substantiate this theory. Given such a state of global economy, we don’t need an astrologer to comment on the state of iron & steel industry, do we?
 
The steel demand all over the world has gone southward. For all these years, the major trigger for the demand was China but is no more there. Chinese steel consumption seems to be reducing and naturally their appetite for iron ore has also reduced. The increased exports from China have put tremendous pressure on finished steel prices all over the world inducing stress throughout the process chain. The worst part is that raw material prices have not reduced in tune with the finished steel prices. The situation is absolutely grave and there is almost blackout in front of the iron & steel industry. Stagnated demand on one hand and unviable raw material prices on the other !
 
As regards India, the cheap imports have risen substantially during last year putting great pressure on finished steel prices. Further, the issue of iron ore availability is not fully resolved. The big integrated steel plants may be in a position to absorb or sustain this blow and survive through this lean period but medium and small steel plants are just counting days. No, this is not exaggeration but unfortunately the reality. They are running the plant bearing losses but how long this can continue ?
 
How can the government help the industry in such a tough situation? We are aware that in today’s de-controlled era, government’s role has changed from a regulator to a facilitator but still few things can be done. Firstly, it can give a strong push to mega infra projects which will ultimately result in increased demand for steel. Secondly, it more or less controls the major raw material sources such as iron ore and coal. Seamless availability and a realistic pricing structure of these can induce some viability in the system. Thirdly, the government can restrict cheap imports and prevent the injury to the domestic industry.
 
We still believe that India is comparatively in a better position to combat this challenging situation. Let’s hope Ministry of Steel & Mines, the custodian of iron & steel industry in the country will act fast and pull the industry out of dark !!!
 
Posted in D.A.Chandekar's Views