Falling Steel Prices in China Unnerve Emerging Steel Markets

The business environment in the Russian Federation is slow ahead of the holidays. Distributors are looking to cut inventories to free up working capital and minimize potential losses as current demand shrinks ahead of the eight-day New Year /Orthodox Christmas break. The demand for rolled metal products from the construction side is cool and, according to forecasts, will decrease with the onset of unfavorable winter weather conditions.

The situation on the Brazilian steel market has remained virtually unchanged since November. Business confidence is low. Domestic demand is weak, few deals have been made. Traders hold stocks that exceed current requirements - most of which have been purchased at prices higher than those that exist today. Meanwhile, local producers expect the tough business environment to outgrow at least the first quarter of 2019.

The Indian trading climate is unfavorable. Usage has become weak for seasonal reasons. Local steelmakers are considering a price hike in January, but buyers believe their expectations are unrealistic. Local construction firms are reluctant to buy more rolled steel than they need to meet their short-term needs. Proposals for the import of flat products from third countries are available, but buyers are showing little interest.
With winter approaching, Chinese steelmakers have begun redirecting material to the country's eastern and southern provinces to counter the slowdown in the northern regions. Replenishment is expected to resume after the Lunar New Year holidays (February 4-10) as early as possible, provided there is no unexpected increase in purchases in advance.

Purchasing activity in Ukraine is limited. Currently, stockists are reluctant to place new orders due to the onset of the winter trading period. Despite this, domestic steel companies are looking to boost sales to protect profitability, citing rising cost of raw materials for steelmaking. The local association of metal producers, Metallurgprom, reported that finished steel production in November 2018 was 1.47 million tonnes, down 3.3 percent from the previous month.

In Turkey, the steel market is slow, and the margins of local distributors are shrinking. Most of these companies plan to continue with conservative stock levels during the January-February trading period. Meanwhile, end-user groups plan to closely monitor the price premium charged by local factories on the cost of imports before deciding where to buy. Export business opportunities in us