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10.Mar. 2010
According to The World Steel Association, European steel demand will bounce some 20% in 2010 as the global industry recovers, but much of the West's business has been irrevocably lost to the East.
The World Steel Association said that European steel demand will bounce some 20% in 2010 as the global industry recovers, but much of the West's business has been irrevocably lost to the East.
Mr Ian Christmas Director General of worldsteel said the outlook for the world steel industry was brightening and the association would likely nudge its global demand growth forecast to around 10% from 9%, due to the improving global economy.
He told Reuters in an interview that “The industry is in a positive mood. But still cautious about the recovery.”
Global steel demand in 2010 would return to 2008 levels, but that demand in "old industrialized countries" this year would only be half way back to 2007 levels. He said “China will continue to grow around 10% and you'll find double digit increases in demand in the old industrialized countries.”
He told “Europe has permanently lost some businesses to other parts of the world and it will never come back. The emerging economies are putting on steam and therefore we've seen a permanent shift in the dynamics of our industry.”
He said demand could grow 27% in Germany and 30% in France in 2010 as Europe's major economies recover. But he added the crisis had done permanent damage to the Western steel industry as business thrived in fast growing Eastern economies like China and India.
Mr Christmas added that restarts of blast furnaces across Europe signaled a return of confidence in the industry, but that there were also concerns about too much production being restarted prematurely.
Mr Christmas said BRIC countries, Brazil, Russia, India and China, will account for some 60% of the global steel demand this year, compared to 58% in 2009 and 50% in 2008.
He said “Further growth in China and India would be domestically driven. Rising income levels in these countries will drive domestic consumption, therefore the engine of growth is no longer in the old world, it is now permanently switching to the new world.”
He added that the autos sector was going to be key to the industry's recovery. He said “Automotives clearly are going to be a positive dynamic in China and India. There was more uncertainty about where disposable income would go in the West. Improving Western auto sales in 2009 may have been the result of government backed scrappage schemes encouraging people to bring forward sales that would otherwise have occurred in 2010.”
But he attributed rising car sales in China and India to real demand.
[Steel GURU]
10. Mar. 2010
Damstahl´s March briefing reports about an increasing demand for stainless steel. To an increasing extent the mills are utilizing their production to an optimum.
Our March briefing reports about an increasing demand for stainless steel. To an increasing extent the mills are utilizing their production to an optimum. This is due to an adaption to their production capacity and thus a utilization of 70% is optimal for the mills.
At present the limits for the price development for nickel and molybdenum are tested in the upwards direction. Refilling of stocks, increased consumption in the process industry and a generally carefull optimism are all factors that form the basis for the price increases finally for a long time not only being based on speculation.
Mills – European mills have increased their stainless supply substantially in Q1/10 to cope with increasing order intake. Capacity utilizations reached levels of 70%. Both improved demand from end use segments and increasing orders from stock-holders, contributed to the positive development in the first months of 2010. Most European mills expect however a slight slowdown of production in the second quarter. In general, the market for cold rolled flat products is much better than for hot rolled products.
Profit Situation has started to improve in Europe. A number of mills (TK and Outokumpu in Europe) and distributors still reported losses in Q4/09. However, increasing market prices (higher alloy surcharges and base prices expected) and reduced costs will enable the mills to return to (more satisfactory) profits.
Distribution and stocks: after de-stocking in Q4, the market started to re-stock again in Q1 in expectation of a demand improvement, empty material pipelines and increasing raw material prices. But: it is again a moderate up-stocking activity. Most distributors prefer a conservative stock level planning after 2008/2009 experiences.
Industry Segments: better order intake for new projects and re-start of postponed projects will have a positive effect on the process equipment sector in 2010. Demand will climb particularly in HY2 due to a time lag between order intake and material flow. The further development in consumer durables, automotive and building & construction remains uncertain: there is only cautious optimism – many European buyers even remain pessimistic for their future business expectations. They will also remain hesitant with new orders.
Macroeconomics: in general, the growth dynamics for the European economy is still rather limited. 2010 will not compensate for drastic 2009 setbacks. The EU-commission expects an EU-27 GDP growth of only 0.7% for this year, which is again far below normal growth patterns.
Raw Materials: increasing demand for raw materials would wide initiated an upwards tendency in raw material prices. Nickel exceeded the 23,000 USD/t mark recently, whilst the extremely high LME stocks started to decline. It is expected that raw material price will continue to increase in Q1. The introduction of Mo at the LME (February) has had a major impact on the prices. Mo exceeded the 45,000 USD/t mark in early March.
[Metal Supply news]
10. Mar. 2010
In China, local PE markets are facing downward pressure as a result of poorer than expected demand and weakening ethylene markets. A major producer in the East reduced their offers for LLDPE film by CNY300/ton ($44/ton) while also cutting their offers for HDPE film by CNY200/ton ($29/ton), citing poor demand and rising stock levels as the reasons for their price decreases. The producer's new offers stand at CNY11400/ton ex-warehouse East China, cash inc VAT ($1427/ton without VAT) for LLDPE film and at CNY10300/ton with the same terms ($1289/ton without VAT) for HDPE film.
Meanwhile, another major producer in the East announced a price reduction of CNY350/ton ($51/ton) for LDPE film, while also cutting their HDPE and LLDPE film offers by CNY200/ton ($29/ton), bringing their new offers to CNY12800-12900/ton ($1602-1615/ton without VAT) for LDPE film, CNY11900-11950/ton ($1490-1496/ton without VAT) for LLDPE film and to CNY10400/ton ($1302/ton without VAT) for HDPE film, all on an ex-warehouse East China, cash inc VAT basis. The producer attributed their price reductions to their mounting inventory levels.
[Chemorbis]
10. Mar. 2010
In Europe, propylene costs have been on a constant firming trend for some time due to the persistent production issues in the region. Although spot propylene values gained further ground last week rising to €950-960/ton FD NWE, finding an extra support also from higher crude hovering above $80/bbl and soaring naphtha prices, competitive PP offers continue to emerge both in Turkey and Italy.
Taking the recent spot propylene values into account, a theoretical cost of producing PP corresponds to €1100/ton after adding an estimated conversion cost of €150/ton disregarding inland freight rate. Even though PP sellers are asking for increases of €50-75/ton for March, the Italian market is still seeing offers below this €1100/ton threshold, which sellers are trying to surpass for homo PP. The general homo PP offer level reported from sellers stands at €1110-1200/ton FD North Italy, 90 days deferred payment. However, late last week a buyer reported having received an offer for a West European origin at €1080/ton with the same terms while a second buyer purchased some cargoes at €1050/ton from a West European producer on FD North Italy, cash payment basis.
In Turkey, the overall European offer range for raffia is quoted at an adjusted level of €1045-1090/ton CFR Turkey, cash. Although it represents a slight increase from the prior week as a result of the increase attempts of sellers, these offers are still standing below the neighboring Italian market as well as the theoretical production costs for European PP.
The existence of such offers affirms the weak state of demand in Europe, according to some sources. It can also be a sign of higher than anticipated stocks at sellers, they argue. Competitive offers are randomly emerging in the Italian market while more cargoes with cheaper prices are diverted to Turkey.
[Chemorbis]
10. Mar. 2010
Recent developments in global ethylene markets, which have seen US ethylene prices soaring to new heights and tumbling prices in major Asian markets, have begun to have an impact on spot VCM markets, which are in turn likely to lead to changes in global PVC pricing.
In the US, the January and February monthly ethylene contracts were settled at the beginning of March with a cumulative increase of $210/ton over their December level, while spot prices have also exhibited strong upward movement in the early months of 2010. Spot ethylene prices posted a cumulative increase of $475/ton in the first two months of the year and have already posted further increases of $250/ton in the first full week of March. Reacting to the sudden spike in ethylene feedstock costs, VCM sellers in the US have raised their offers as well. Spot VCM offers for export were reported $150/ton higher on a week over week basis, with much of the impetus for higher VCM prices coming from stronger ethylene costs. Although delayed purchases of spot ethylene have helped mitigate the impact of the rise in ethylene costs on downstream markets, one EDC producer has already predicted that the massive upward shift in production costs will soon make itself felt on spot PVC prices in the US, which may affect their competiveness in global markets, where American PVC sellers had been enjoying cost advantages throughout much of 2009.
Meanwhile, declining spot ethylene prices in Asia have begun to take their toll on the region's VCM market. At the end of February, a major Japanese producer announced their VCM offers for March with increases of $40-50/ton when compared with their February done deal levels. The producer justified their increase targets by pointing to higher March PVC import offers to the Chinese market, which posted similar month-over-month increases. Although March PVC business has been finalized at or close to producers' initial offer levels, buyers are showing stiff resistance to higher VCM prices. Although buyers generally attributed their resistance to softening PVC prices in China's domestic market and signs of softening regional demand, falling ethylene prices are also supportive of buyers' resistance to higher VCM offers. Spot ethylene offers to Northeast Asia declined around $50-70/ton over the past week, bringing the cumulative decline from early February to around $180-190/ton.
[Chemorbis]
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