Commodity market report

Global steel short-term outlook December 2016

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Report summary

Worldwide underlying sector demand has remained lacklustre but this fundamental weakness has not prevented yet another increase in steel prices in December. In China enforced closures of induction furnaces have helped long product prices rise faster than those of flat products but we do not think that further increases are sustainable. As the speed of capacity clamp downs drops and raw materials costs ease weak demand should once again lead to a fall in steel prices. Meanwhile in Europe short term steel prices will be supported by yet another set of antidumping duties. However with demand outlook weak for 2017 and no capacity closures in sight this surge is unlikely to last past the holiday season.

What's included

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  • Document

    Global steel markets short-term outlook data Dec 2016.xls

    XLS 287.00 KB

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    Global steel short-term outlook December 2016

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Table of contents

Tables and charts

This report includes 35 images and tables including:

Images

  • Key companies: Image 1
  • The tide has turned for coking coal and iron ore prices
  • Turkish imports of scrap caught up with stronger crude steel production, supporting prices
  • Global steel production growth at 0.4% in 2016
  • Global PMIs point to expansion
  • Emerging markets apparent steel consumption
  • Mature markets apparent steel consumption
  • Improving profitability will underpin production
  • Long product stocks rising...
  • AD duties fail to stop imports
  • H2 price hikes unlikely to stick
  • Steel stocks have continued to fall
  • Domestic production and shipments remain low
  • Indian underlying demand continues to grow…
  • Steel production expected up 7.6% in 2016...
  • Domestic demand recovers slightly...
  • …but exports will remain sluggish
  • Monthly Brazilian steel demand edges up
  • A Brazilian-automotive u-turn?
  • The induction furnace crackdown supported billet and rebar prices, but undermined scrap price
  • Strong demand (up 1.3% year-on-year and flat quarter-on-quarter) supported Q4 price rises
  • Global imports of HDG into the EU are rising. Imports from China have doubled year-on-year in the last four quarters
  • EU AD duties imposed on CR coil have all but stopped imports from China and Russia. CR coil imports from countries not subject to duties continue to rise
  • Low regional price premia will constrain imports
  • As the energy sector recovers so will OCTG prices
  • Q1 2017 HR coil prices will travel in opposite directions. In the US, price premia are too thin and will start rising, supporting prices. In China and the EU, the year-end price euphoria will come to a reckoning with weakening demand and falling costs
  • Chinese rebar prices are poised to fall in Q1 as costs and demand fundamentals start to reassert themselves. Some upside risk remains in H1 2017, as government policy on construction and capacity closures at induction furnaces remains uncertain

Tables

  • Prices and other key data
  • EBITDA margin for selected steel makers (table and chart)
  • Costs: Table 1
  • Selected downstream acquisitions
  • Operating results
  • Market structure: Table 1
  • Supply-demand balances: Table 1
  • Supply-demand balances: Table 2

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