However, the China Iron & Steel Assn (Cisa) expects Chinese steel prices to drop even further over the rest of July on oversupply pressures, seasonally
weak demand and the slowdown in the Chinese economy.
The decline in iron ore spot prices means that junior miners find themselves under a lot of pressure again and production cuts are expected to be announced
in coming months.
As the brakes tighten more on the Chinese economy, the prospect of yet more
steel product exports is looming, as domestic steelmakers seek outlets for
their material.
The billet market is a case-in-point.
Billet exports from China
have once again become a hot topic globally, and Steel First’s editorial teams
around the world have asked market participants about the effects the rising exports have on trade flow in their regions.
Automotive sector
Further downstream, in the automotive sector, Brazil,
Russia and China stood out
with more negative headlines.
Car output in Brazil fell by 14.8% year-on-year in June to 184,000 units, according to figures
released by the country’s automobile association, Anfavea.
In the first half of the year, Brazil’s
car output dropped by 18.5% year-on-year.
The Assn of European Businesses (AEB) has slashed its 2015 forecast for new car
and light commercial vehicle (LCV) sales in Russia.
The association now expects a 36% drop in sales volumes for the year, amounting
to 1.55 million cars and LCVs.
China’s vehicle market also remained in a downward trend in June, with production and
sales of passenger cars falling for the first time on both a yearly and monthly
basis since December 2008.
In contrast, Turkey
registered a 51% year-on-year increase in auto sales in June.
Mexico’sauto production grew by 6.7% year-on-year in June, according to figures
released by the country’s car association, Amia.
Car production in Argentinarose by 6.3% year-on-year in June, according to figures released by the
country’s auto association, Adefa.
Around the world
The Brazilian steel industry, which already faces many different challenges, is
seeing added pressure from a money-laundering probe which is leading to a
slowdown in project investments.
We will be reporting from the 26th Brazilian Steel Congress, starting on Sunday
July 12.
The country’s steel association, IABr, is expected to publish yet another
downward revision of apparent steel consumption in the country at the event.
In the latest Steel First interview, Kaizer Nyatsumba, ceo of the Steel &
Engineering Industries Federation of Southern Africa (SEIFSA), talks about the
need of South Africa’s
steel industry for political leadership and collaborative efforts in order to
progress.
And finally, we examined why demand for steel products for energy projects in
the North Sea has been less affected by globally depressed oil prices than inother regions.
New price assessments
We launched a weekly Chinese metallurgical coke export price assessment this
week.
Steel First assessed non-blended cargoes of coke with 65% coke strength after
reaction (CSR), 12.5% ash and a physical size of 30-90mm at $153-155 per tonnefob Tianjin on Tuesday July 7.
We also added a weekly Egyptimport billet price assessment to our portfolio.
The market is expected to revive in the second half of July, after Ramadan
ends.
The price assessment stood at $360-365 per tonne cfr Egypt on Thursday July 9, down by
$15 per tonne week-on-week.
