There has been an overall drop in prices of steel products in Abu Dhabi, even as a surge in Chinese steel demand has pushed global output close to what it was before the economic crisis.
Prices have dropped between seven and 17 per cent compared to October 13.
According to figures released by the Statistics Centre - Abu Dhabi (Scad), prices of flat steel went down by 11 per cent, falling by almost Dh300 per tonne. The price of flat steel from Turkey dropped to Dh2,300 per tonne from Dh2,600 on October 13.
Meanwhile, rebar prices dropped between seven and 12 per cent during the past 10 days. The cost of six to eight mm rebar from Turkey dropped by seven per cent and fell by Dh175. It is now priced at Dh2,125 per tonne compared to Dh2,300 during the second week of October.
Similarly 10-32mm rebar from Turkey and the UAE dropped by 12 per cent to Dh287, falling to Dh1,962 per tonne compared to Dh2250 on October 13. Qatari rebar, however, increased by eight per cent, going up to Dh2,450 per tonne from Dh2,250 on October 13. Speaking to Emirates Business, Karel Costenoble of Mesteel, an online portal providing information on steel products, said prices of flat products have already bottomed out and a correction is imminent.
"Prices of hot rolled coil was priced at about $510 to $520 per tonne CFR Dubai, whereas it will be moving up by $20 to $25 per tonne," said Costenoble.
According to him, prices of beams have slightly reduced. The price of a tonne of UB/UC from South Korea, South Africa and India has come down from $660 (Dh2,423) a few weeks back to $610 to $620 CFR Dubai.
He said prices of rebar from Turkey is holding with Turkish bars hovering near $475 per tonne CFR Dubai.
"The slide in prices of Chinese products will come to an end soon. We might see an increase in prices of Chinese steel products by about $20 to $25 per tonne. However, there are no signs of a drop in production," he said.
According to reports, the price fall in China is a result of capacity expansion.
Reports quoting China Iron and Steel Association (Cisa) said steel prices kept falling in September due to fast capacity expansion, which further exacerbated market supply glut.
A report in Mysteel.net said the steel association expected the market will level off though it still relies on the degree of capacity expansion.
According to the latest figures released by the National Statistics Bureau, crude steel output in September stood at 50.71 million tonnes up by 28.7 per cent year on year, and the second high this year.
Daily output in the month hit an all-time high at 1.69 million tonnes. Steel stocks in major cities also kept rallying and total stocks up 2.74 per cent by the end of September, approaching this year's record. As to futures market, Cisa said there will be slim space for further steel price declines in view of the slumping profit at steel mills.
Profit at large and medium-size steel mills dived 77.65 per cent on year in the first nine months.
Similarly, according to statistics by the World Steel Association, an increase in the Chinese steel production and demand has pushed global output close to what it was before the economic crisis.
World crude steel production for the 66 countries reporting to the association was 107 million metric tonnes (mmt) in September. This is just 0.6 per cent lower than September 2008. The world total crude steel production month-on-month has continued to show a steady increase since April.
China's crude steel production for September was 50.7 mmt, 28.7 per cent higher than September 2008.
Elsewhere in Asia, Japan produced 8.3 mmt of crude steel in September, down 18 per cent compared to the same month last year. South Korea had a decline of 2.4 per cent from September 2008, producing 4.4 mmt of crude steel in September 2009.
Turkey produced 2.1 mmt of crude steel in September, 1.8 per cent down from September last year.
In the EU, Germany's crude steel production was 3.2 mmt in September 2009, a decrease of 21.7 per cent from September 2008. France produced 1.3 mmt in September 2009, down by 15.3 per cent from September 2008. The US produced 5.4 mmt of crude steel in September, a decrease of 31.4 per cent compared to the same month last year.
In the Middle East, Iran produced 0.9 mmt of crude steel in August 2009, four per cent more than in September 2008. Total crude steel production in the 66 reporting countries for the first nine months of 2009 was 866 mmt down by 16.4 per cent over the same period of 2008.
Source: Emirates Business
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