Global steel prices have declined to unimaginable levels over the last couple of months reminding the nightmares of 2008 financial Tsunami. Although in the post 2008 period, much of the industry has learnt to cope with catastrophe as survival ploy, wisdom still seems to elude some of the steel mills in India. The story of Chinese slow down and rapidly devaluating Russian Ruble has broken the back of fledgling steel market just when it was clawing its way back to normalcy. The resultant overflow of steel from China, Japan, South Korea and Russia in international market has neutralized isolated pockets of revival.
Uncannily even the scrap levels have declined in the peak of winter touching lows of USD 310 per tonne CFR Turkey. The emaciated demand has affected billet levels falling below USD 400 per tonne FOB Black Sea. In fact if recent reports are to be believed Chinese mills have offered it at USD 380 per tonne FOB. HRC prices have also climbed down to less than USD 435 CFR from Ukraine and USD 450 CFR Russia implying FOB levels of lesser than USD 400 mark. After the lowest 2014 GDP growth in last 24 years chances of recovery of Chinese domestic steel sector remain elusive spelling dooms for steel prices in global market.
On the other hand, Indian steel mills are faced with double whammy. Plagued by slow demand growth in domestic market, new commissioning as well as production ramp up is leaving them with surplus export volumes, which they are unable to liquidate in deviously competitive international market.
Source: Steel Guru
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