Commodity market report
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19 Pages

Global steel short-term outlook August 2016

Global steel short-term outlook August 2016

Report summary

China steel prices continued to rise in August mainly supported by deepening capacity cuts. These continue to feed the perception that there might be tight supply of steel in the Chinese market. With crude steel production up 1.5% year-on-year in July, and exports at more than 10Mt, we do not see any tightening of steel supply materialising any time soon. In the USA, prices have continued to fall, undermined by weakening demand and rising steel imports. As price premia in the USA remain persistently high, there is still scope for further price declines in the remainder of the year. The same outlook applies to prices in Europe, where anti-dumping duties have afforded a degree of stability to prices, despite the uncertainty caused by Brexit, the decline in construction and the slow-down of manufacturing activity. In August, we have added downstream product coverage to our US steel demand model summarised in an insight - What drives US flat steel demand?

What's included?

This report includes 2 file(s)

  • Global steel short-term outlook August 2016 PDF - 510.87 KB 19 Pages, 9 Tables, 27 Figures
  • Global steel markets short-term outlook Aug 2016(V1.2).xls XLS - 287.50 KB


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: demand will recover in H2
      • Price rises due to capacity-cutting efforts
    • EU: demand for EU steel exports slows
      • EU domestic demand is also struggling in H2 2016
      • EU capacity reductions appear unlikely
      • EU prices flat in August
    • US steel prices have continued to fall
      • Steel demand growth has disappointed
      • Import pressures have returned
  • Costs
    • Iron ore prices above US$60/tonne until the end of August
    • Coking coal prices supported by Chinese capacity closures
    • Scrap price edged up in August as Turkish mills increase orders
  • Key companies
  • Market structure
    • Global
    • China
    • Europe
    • USA
    • India
    • Japan
    • Russia
    • Key quarterly data

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

  • Executive summary
    • Prices and other key data
  • Supply-demand balances
    • Steel price has increased significantly since July
    • Both production and apparent consumption will increase in H2
    • Supply-demand balances: Image 3
    • Supply-demand balances: Image 4
    • Supply-demand balances: Table 1
    • Steel imports are rising...
    • trade cases provide only partial protection
    • Selected downstream steel developments in August
    • Supply-demand balances: Table 3
    • High US premia have started to attract imports originating in countries non-targeted by AD duties, expect further price falls in Q4.
    • Steel inventories at their lowest since 2010 and capacity cuts have lifted steel prices in China. We expect rebar to hover around US$340-350/tonne in the remainder of the year.
    • Supply-demand balances: Table 4
  • Costs
    • Iron Ore stocks decline only slightly
    • Turkish scrap consumption has risen faster than hot metal
    • Costs: Table 1
  • Key companies
    • EBITDA margin for selected steel makers (table and chart)
    • Key companies: Image 1
    • Operating results
  • Market structure
    • Global steel production
    • Global PMI
    • Emerging markets apparent steel consumption
    • Mature markets apparent steel consumption
    • Exports continued to increase in July...
    • Crude steel production will also remain high in H2
    • CIS is the EU's largest source of steel imports
    • The EU will remain a net importer of steel
    • Steel demand down 9% year-on-year ytd July
    • Imports are rising
    • Indian steel demand continues to grow…
    • Trade wars continue
    • Demand in the construction sector will recover in H2...
    • ...However, crude steel production will hardly increase
    • Demand outlook remains weak…
    • Finding a destination for exports is difficult…
    • Market structure: Table 1
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