Rebar prices in the UAE continued to increase, as domestic prices remained above $530 per tonne. Import prices, especially from Turkey, have also been going up compared to last week.
Turkish firms are booking rebar to UAE customers at $520 per tonne compared to $515 during the second week of August, a representative of a leading trading company told Emirates Business.
However, demand for steel continues to remain low within the UAE, and especially in Dubai, as many construction projects that have been cancelled or put on hold are yet to take off.
Traders yesterday said that the main reason for the rise in prices is the increase in the cost of scrap and billets.
According to Ajay Aggarwal, CEO of RAK Steel, local prices of steel continue to remain strong and would remain so for some time to come. "Right now we have been selling at $530 per tonne. The demand continues to remain the same as before, and it has not increased much," said Aggarwal.
Meanwhile, according to Karel Costenoble of Mesteel, demand in the UAE in general has been low and will continue to be so during the coming weeks. "Especially now that it is Ramadan, it is going to be a period of low activity. The market is not expecting any spurt in demand soon," said Costenoble.
"In the GCC, however, the market in Saudi and Qatar is a bit better but otherwise the regional market is low as many as projects are either shelved or postponed," he said.
According to him, the increase in Turkish rebar prices is mainly due to increase in the prices of scrap and billets. "We are not sure for how long the prices will continue to increase," he said.
According to a Metal Biz report, small steel mills in Turkey had to increase the imported price of steel scrap due to the strong demand in Far East area, in a bid to compete with the foreign buyers and ensure production.
The mix heavy scrap for September delivery lifted import prices from last week's $300 and $305 per tonne to $310 and $315 per tonne, with an increase of $15 per tonne. The shred scrap settled price increased to between $315 and $320 per tonne from $305 and $310 per tonne last week.
The price rise of steel scrap did not prevent Turkish small steel mills to import from the US and Europe. Turkish steelmakers also said the consumption of blast furnace steel scrap increased 10 per cent to 18 per cent. Previously, Turkey expected to repurchase after the price dropped and predicted it would decrease to $250 per tonne but rates showed an upward tendency.
Affected by the price rise of scrap steel, Turkish mills were forced to increase the price of square billets and long products. The square billet price rose to between $450 and $460 per tonne from last week's $440 and $450 per tonne. Rebar export prices increased by $20 per tonne to between $500 and $510 per tonne from $490 per tonne last week. The offer has even reached $520 per tonne but deals are yet to be concluded, said the report.
Meanwhile, according to Costenoble, prices of structural steel remains stable. "Beams are priced at around $650 to $700 per tonne," he added.
And Chinese prices are starting to come down for certain products, he said. "They had gone out of competition as the prices went up and although it has still not become competitive, prices are slowly going down showing signs that prices will soon fall further," he said.
"Some of it has become competitive though. The i-beams are priced at $630 per tonne coming down from $680 per tonne two weeks ago. Therefore they have definitely become competitive. Similarly the price of channels is now below $600," he added.
But when it comes to rebars, the Chinese are not yet competitive, said Costenoble. "Anybody who buys Chinese steel would expect it to be about $40 to $50 cheaper compared to Turkish or other steel products," he said.
Meanwhile, crude steel production for the 66 countries reporting to the World Steel Association (Worldsteel) in Brussels, was 103.9 million metric tonnes in July, marking the highest monthly production figure this year.
The July total jumped by more than four million metric tonnes compared to June production. However, compared to July 2008, the world's steel production was 11 per cent lower in July 2009. In June, global steel output reached 99.8 million tonnes, up from May's production of 95.6 million tonnes.
In July, almost all the major steel producing nations – including China, Japan, Germany, the United States, Brazil, Turkey, Russia and Ukraine – reported their highest monthly figures so far in 2009.
Total crude steel production in the reporting countries for the first seven months of 2009 was 653 million metric tonnes, a 20 per cent decrease over the same period in 2008.
The Middle East's production increased from 1.3 million tonnes in June 2009 to 1.432 million tonnes in July. Compared year-on- year, July's production in the region where data was collected (Iran, Qatar and Saudi Arabia), the production went up by about 2.5 per cent. The three countries put together produced about 1.27 million tonnes of steel in July 2008.
During the first seven months of 2009, the three countries in the region produced about 9.67 million tonnes of steel compared to 9.615 million tonnes of steel during the same period last year, registering a 0.6 per cent increase.
China's crude steel production for July 2009 was 50.7 million metric tonnes, 12.6 per cent higher than July 2008. It is the first time ever that China produced more than 50 million tonnes of crude steel in a month, accounting for almost 50 per cent of world crude steel production. Since April 2009, China's crude steel production has shown a steady month-on-month increase.
Elsewhere in Asia, Japan produced 7.7 million metric tonnes of crude steel in July 2009, down by -24.9 per cent compared to the same month last year. South Korea showed a decline of -13.3 per cent from July 2008, producing four million tonnes of crude steel in July 2009.
In the EU, Germany's crude steel production was 2.7 million metric tonnes in July 2009, a decrease of -28.8 per cent from July 2008. The UK produced 0.8 million tonnes in July 2009.
Source: Emirates Business
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