Commodity market report
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21 Pages

Global steel short-term outlook April 2017


Global steel short-term outlook April 2017

Report summary

In China the government trod the narrow path of economic readjustment. On the one hand, the never-ending stimulus continues. A mega tax cut will start in July benefiting consumers and industries alike and an urban hub will be built almost from scratch to ease the demographic pressure on the Beijing area. On the other hand, concerns of an overheating property market remain. Measures introduced in Q1 to cool the market have not worked and construction activity continues unabated. Rebar prices have therefore done well, they surpassed European prices in February and March, but they have started to falter in April. A fall is inevitably, high stock, falling costs and stubbornly high crude steel production will promote it. Endless stimuli to the economy will, however, soften the fall.


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This report includes 2 file(s)

  • Global steel short-term outlook April 2017 PDF - 509.87 KB 21 Pages, 7 Tables, 29 Figures
  • Global steel markets short-term outlook data April 2017.xls XLS - 298.50 KB

Description

As global demand weakens and commodity prices fall, we're seeing a challenging environment in the metals and mining industry. Mining companies are increasingly coming under pressure to reduce operating costs, causing many to shift their strategic planning, delay new investments and look to long-term future growth.

This Steel Short Term Outlook report provides a detailed breakdown of global supply and demand balances in this market, as well as price forecasts.

Mining companies, investment banks and investors can use this report to understand the future direction of the ferrous and base metals market. It will also help you assess the impact of key industry issues and events on market balances and pricing.

From acquisitions to investments, Wood Mackenzie helps you plan, forecast and benchmark in the metals markets. Our proprietary database and analyst expertise combines robust production, consumption and pricing data with detailed analysis to identify market opportunities.

We give you a holistic view of the ferrous and base metals markets so you have the confidence to make strategic decisions.

  • Executive summary
  • Supply-demand balances
    • China
      • The property sector will turn weak later than we expected
      • Plans for a new city
      • Deeper-than-expected tax cuts
      • Capacity cuts gather pace
      • High production will undermine prices
  • Costs
    • Coking coal prices continue to fall, though less smoothly
  • Key companies
    • Industry developments
  • Market structure
    • Global
    • China
    • Europe
    • India
    • Japan
    • Brazil
    • Russia

In this report there are 36 tables or charts, including:

  • Executive summary
    • Prices and other key data
  • Supply-demand balances
    • The recent spike in coal prices will erode steelmakers margins and slow price falls
    • Demand surprised on the upside in Q1
    • EU imports of HR coil from China have been replaced by material from other origins including Brazil, India and Turkey
    • European HR coil prices may have begun to follow Chinese prices downwards
    • Supply-demand balances: Image 5
    • Supply-demand balances: Image 6
    • The impact of Obama's escalation of steel duties was primarily on Chinese-origin material
    • Service center destocking through Q1 suggests that their demand outlook for the coming quarters is more bearish than at end of 2016
    • Supply-demand balances: Table 1
    • April premia over Chinese material in Europe and in the USA stood at US$150 and US$269/tonne, much higher than historical norm. While strong demand and trade barriers may protect prices in the near term, price erosion is inevitable.
    • With high stocks and falling costs, we expect rebar prices in China to continue their fall in the coming months. Upside risk to our forecast are an unexpected strong performance in construction and local market tightness as capacity continues to be shut down.
    • Supply-demand balances: Table 2
  • Costs
    • Costs: Image 1
    • Costs: Image 2
    • Costs: Table 1
  • Key companies
    • EBITDA margin for selected steel makers (table and chart)
    • Key companies: Image 1
    • Operating results
  • Market structure
    • Crude output reached a record level in March
    • EU leads global expansionary sentiment
    • Emerging markets' apparent steel consumption
    • Mature markets' apparent steel consumption
    • EU vehicle production and registrations grow…
    • AD duties are not deterring total imports
    • Market structure: Image 7
    • Q1 2017 sees seasonal increase in utilisation
    • Indian output rises as JSW becomes largest producer…
    • …though end-use demand shows uncertain path ahead
    • Domestic demand upside expected from May…
    • Market structure: Image 12
    • Brazil steel demand indicators
    • Brazil steel-market structure
    • Russian light vehicle sales stall
    • Russian construction down
    • Key quarterly data
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