Daily Steel News - 3 Mar 09

Analyst: 2009 to be 'worst year since the Great Depression'
The US steel sector and the domestic economy likely won't see any significant signs of recovery from the current downturn until the latter half of 2010, according to an industry expert with IHS Global Insight Inc. Speaking yesterday during Steel Business Briefing's Steel Markets North America 2009 conference in Chicago, John Anton, manager of IHS Global's Steel Service division, said the near term outlook is gloomy at best. "2009 will be the worst year since the Great Depression. 2010 will be the second-worst year since the Great Depression," Anton said. "The recession is global, therefore, you can't import (and) you can't export since no one wants your stuff." Anton said the US nonresidential construction sector, a key segment for the steel industry, is unlikely to reach peak levels until 2014, and the housing sector likely won't recover for another three to four years. However, he said US companies can take heart that the recent stimulus package passed by congress will act as a catalyst for driving the economy out of its slump - but not right away. "The US passed the second best (stimulus plan), but it could have been better," Anton said. He pointed to China's recovery plan as the best, since it seeks not only to stimulate demand for products like steel, but to stimulate consumer demand as well. Anton said China will be the first to emerge from the current global recession, likely followed by India, the US and then Europe.

Demand for steel in Gulf to drop by 35% this year
It is reported by Arabian Business that Gulf’s steel construction industry is facing slump and the demand of steel could drop by as much as 35 percent, from 14 million tons in 2008 to 9 million tons this year because of the economic slowdown, estimated by the Dubai Multi Commodities Centre.Construction in parts of Gulf region has slowed with projects delayed or even cancelled. According to a report by the research company Proleads, about US$582 billion worth of projects in UAE are on hold currently. But there are some parts of this region like Abu Dhabi are seeing growth of construction industry.

Scrap prices continue downtrend in East Asia
Scrap import offer prices are generally prevailing at $260-270/t cfr east Asia for bulk shipments of 80:20 HMS ½ and at $240-250/t cfr for containerised cargoes of 80:20, importing sources in the region tell Steel Business Briefing.
An offer of bulk mixed cargo divided equally between 80:20 HMS 1/2 and shredded is reported at $278/t cfr Southeast Asia. In Taiwan there is very little interest to book imported scrap because domestic scrap prices have fallen ($14/t last week) to the equivalent of $210/tonne, whereas several containerised 80:20 offers are prevailing as low as $230-240/t cfr. "The price idea of Taiwanese buyers for imported scrap would be $200/t cfr at the most," a Taipei-based trader says. A Chinese importer says that offers of dry bulk 80:20 are prevailing at $260/t cfr. While there has not been much import buying from China recently, there was a booking of a prompt shipment of some 30,000 tonnes of Japanese H2 scrap at $230/t cfr China.

E. Asian longs import markets brace for further price falls
Traders in east Asia are concerned that sliding prices for billet and rebar could be part of a second wave of price falls . a repeat of what took place when billet reached lows of $300-320/tonne cfr in early November last year and rebar was just under $400/t cfr. Strong buying, particularly of imported billet from China, took place ahead of announced government stimulus packages.
Imported rebar offer prices are prevailing at $430-440/t cfr Singapore for Taiwanese material and $450/t cfr for Korean material, down from offers of $470/t cfr a week ago. Turkish origin rebar was last transacted at $450/t cfr Singapore. Similarly, offers of Taiwanese billet were prevailing at around $380/t cfr last week. Ukrainian-origin billet was recently booked at $375/t cfr Vietnam.

Spot iron ore price falls amid order cancellation rumours
The price of 63% Fe grade Indian iron ore fell to $72-74/dmt by the end of the week commencing 23 February, down from around $80.5/dmt the week before. In the second week of February, the price was sitting at a post-October high of $84.5/dmt before market confidence started to disappear. As Steel Business Briefing has reported, deliveries to China have returned to peak levels with some 31m t of iron ore due to arrive before 10 March. One major iron ore trader has chosen to defer up to 20 shipments of ore from India to China because of the falling spot price and current oversupply situation, "Shipments on the water are not being paid, or are being turned away, "We expect prices to decrease further," he tells SBB.

Iron ore reference prices drop again, says The Steel Index
The reference price for 62% Fe content iron ore fines dropped by $1.60/dry metric tonne to $72.70/dry metric tonne cfr Tianjin port, China.
The reference price for 58% Fe content iron ore fines also fell to $62.70/dry metric tonne same basis. However, prices for this grade are still $2.70/dry metric tonne higher than four weeks ago.