The export prices at present are better, because of reduction in inventories and many an exporter feel that the time right to for an increase. Like in most major markets in the world, the cold rolled flat steel market in the south east Asia is still waiting for a significant improvement. The global prices are low and the domestic capacity lies underutilised. There are talks of initiating anti-dumping cases against imports in countries like Thailand.

Permits are required in Malaysia to import steel. The government may also increase import duties on HR coils to make customers buy from the recently commissioned plant of Megasteel. The import prices of hot rolled coils are in the range of $260-265 per tonneC&F. But, cold rolled coils from the CIS are available at $270-320 C&F.

No anti-dumping duties on hot rolled coils

The European Commission (EC) has decided not to impose any preliminary anti-dumping duties on imports of hot rolled coils from India, Yugoslavia, Bulgaria, Iran, Taiwan and South Korea. The EC, however, will continue its investigation on the case for final determination. Nucor will have another 7,50,000 short tonne of CR capacity per annum at its Berkeley, South Carolina plant. This new mill will take Nucor-Berkeley's CR sheet capacity to 1.5 million tonne per annum in another year. Earlier, Nucor has decided to raise its hot rolling capacity by an additional 8,00,000 tonne per annum to about 2.3 million tonne per annum by installing another thin slab caster at Berkeley. The efforts are to add value to their own hot rolled coils and also to get out of excessive dependence on the hot rolled coils in the market. The company has also started a 5,00,000 tonne per year sections mill atNucor-Berkeley early this year.

Ferrous prices low

The ferrous scrap prices are likely to increase marginally only as plentiful supplies from Russia and Ukraine hold prices down, even when demand seems to be up in Europe with the steel mills are back in business after summer shutdowns. The Turkish buyers are temporarily out of the market. But, their return may not improve the situation as much as the Turkish buyers are bargaining hard to bring down the prices further. The exporters of scrap in Russia and Ukraine are trying to push the prices up.

The Russian sellers are lso facing the threat of increase in export tax on scrap and steel. Turkey has imported at $81 per tonne C&F Izmir for grade A3 material. Prices may increase by a dollar or so per tonne at the most. The situation of oversupply continues.

There is little demands in the spot market as most of the buyers have already made their purchases for September and October. Now the market is waiting for the buyers to book for November andDecember deliveries and beyond. The prices of winter deliveries may be higher, if supply disruptions are foreseen for Black Sea movement from Russia and Ukraine. But, if winter conditions are not as bad this year, the prices may not rise at all. With Ispat International announcing its intention to raise prices of wire rods by about $30 from October onward, the European market seems upbeat. They have also announced that they may increase prices further in the first quarter next year. Ispat's move may be followed by others. The company says that demand for wire rods is now strong in Europe and the inventories are also very low.

In particular, they say that the mesh quality products are in high demand. The European construction industry has been buoyant, and the automotive industry is also doing very well. Although, every company is not very certain of the prospects of another price hike early next year, companies like VA are positive on the continued strength of the markets. British Steel has plans toincrease prices in January only for the automotive grades.

0Eurofer to meet Turkish industry

Eurofer is planning to have a meeting with the representatives of the Turkish steel industry involved in the wire rod dumping case. The meeting is likely to take place alongside the meeting of the Turkish government officials with EC. The case involves producers Golakoglu, Habas, TDGI, and Gukorova. The company claimed in July that imports of wire rod had increased by 16 per cent in the first four months of 1999 compared to the earlier fiscal, and that imports of Turkish rebar had increased on last year by 150 per cent. According to them, the same has increased further subsequently.

They say that in the first seven months wire rod imports have jumped by 29 per cent over that in the corresponding period last year. The figure was 250 per cent for rebar. They also said that Turkey that had exported at the rate of 16,000 tonne per month to the EU in 1998 now does 55,000 tonne per month now in 1999.Malaysia restricts import of hot rolled coils.

Users of hot rolled coil in the country are very unhappy that the Malaysian authorities have restricted the import of these in order to support its first hot strip mill, Megasteel, which started up this year. There are complaints that the procedure for obtaining a permit to import material is cumbersome. Effective this month, importers can import hot rolled coil only if Megasteel cannot produce the specification required. Currently, the strip mill can only produce hot rolled strip down to slightly below 2mm and without skin-pass, a material suitable for pipemaking. The pipe industry says that with this protection, Megasteel is asking for $331 per tonne for its HR coils that is much higher than the global prices.

The clampdown on imports follows the issuing of a large amount of import approval permits during May-August, following an announcement on April 29, that up to 80 per cent of a user's requirements can be imported under the scheme. The users findimporting more economical at an C&F price of $210-220 per tonne with an import duty of 25 per cent.

Philippines eyes new steel projects

The Philippine government is considering backing the construction of a new integrated steel plant according to media reports. The Philippine National Oil Co has proposed to build a combined gas-fired power plant and iron and steelmaking facility at an estimated cost of $1.57bn. The plant, which would produce 1.66m TPY, would mainly be financed from foreign sources through the Austrian Credit Export Bank and Voest-Alpine. The project is still under feasibility studies.

Pressure on Clinton to impose wire rod duties

Close to 100 senators and congressmen have pressed President Clinton to impose a four-year trade sanction against low-priced wire rod imports that caused "serious injury" to the domestic industry in the form of lost profits, plant closings, shutdowns, layoffs, cancelled investments and unused capacity, reports American Metal Market.

"The wirerod industry and its workers have done precisely what you and your administration have encouraged the steel industry to do to respond to the surge of imports," a letter to President Clinton said. "They have played by the rules that are established. They are placing their trust in our trade laws, the same laws you have pledged to enforce strongly in pursuit of free and fair trade. It is now time for you to consider the US International Trade Commission recommendations and decide what action is appropriate to address the serious injury and facilitate efforts by the domestic industry to make a positive adjustment to import competition," the letter added. The President Clinton is expected to take a decision soon.

World steel output increases

World steel output climbed 3.3 per cent in August from the same month last year, but the year-to-date total remained 2.7 per cent below the first eight months of 1998, the International Iron and Steel Institute said.Steel output in the 63 countries covered by theIISI review, which accounted for about 98 per cent of world steel production last year, was 64.3 million tonne in August. Total output for the first eight months of the year reached 502.6 million tonne. August's increased output came mainly from the former Soviet Union, the Middle East and southeast Asia, while declining output in most other steel-producing regions appeared to be slowing. Steel output in the Common Wealth of Independent States was up 29.7 per cent in August from a year earlier to 7.5 million tonnes, Middle Eastern production was up 10.2 per cent to 7,90,000 tonne and Asian output was up 4.4 per cent to 25 million tonne. All major steel producing countries in Asia, except Taiwan posted higher production in August, IISI said.

The steel production in August in the European Union (EU) totaled 11.7 million tonnes, 1.5 per cent less than a year earlier despite higher output by France, Germany and Italy, the three largest producers in the region.The north American steel production in August of 11million tonnes was down just 36,000 tonne from a year earlier. Canadian and Mexican output was higher but US production was 2.2 per cent lower. South American steel production was down by 8.1 per cent from a year earlier to 3 million tonnes, IISI said.

Grvditzer mill may go up for auction

East German steel mill Grvditzer Stahlwerke recently filed for bankruptcy in a Dresden court following the EC's decision that it must pay back subsidies of 238.9 million DM ($126.5 million). The company said that production at present, however, continues as usual, and that a solution might possibly come about by the end of the year. He said that the insolvency administrator indicated that Grvditzer would be put out to tender.

Japan to move WTO

Japanese steel industry is planning to move the World Trade Organization (WTO) against US anti-dumping decisions on the country's steel exports. The Japanese industry claims that the US anti-dumping actions on steel are protectionist and are against the WTOrules. It was important to send a message to the world that such a policy would adversely affect development of the world steel industry.

The planned Japanese move will not cover all types of steel involved in the US trade actions, but will focus on hot rolled coils and heavy plates mainly. The industry since cannot go directly to the WTO, would press their case through the Japanese government.

US ferrous scrap exports decrease

The US exporters of ferrous scrap still remain upbeat despite falling exports and low prices ruling the world market. They believe that scrap prices will rebound very soon as demand for these materials are on the rise, especially in the south east and east Asia. They have confirmed increasing number of enquiries from the far east, due to higher prices of pig iron in the world market and a likely slowdown in supplies of these materials from Russia and Ukraine. Till now, however, as discussed above, there is no major upturn to talk about. Although, the delivered prices ofscrap (landed costs of imports) have increased by a few dollars in the Far East, that is mainly due to increased freight in the last two months. In fact, low European prices (has started rising again) have led to substantial import of scrap from Europe in the US. Some experts have viewed that much of the scrap stock that was available in Europe had been sold and that some of the Korean mills may be running low on scrap. There was little to be obtained from Japan and they would have to commit to the higher prices now being sought by US yards.The US experts also believe that Pohang Iron & Steel Company (Posco), South Korea's largest steelmaker, and some of the other Korean mills will have to buy scrap in the next month.

The US ferrous scrap exports in July dipped to 4,43,789 short tonne, down by a third from 6,67,434 tonne the previous month, according to the commerce department of the US. The June market derived its strength from a near-record month of ferrous scrap shipments to Korea, which took 4,01,920tonne from US suppliers-the highest one-month total in two years. In July, though, the flow of scrap from the US docks to Korea slowed to 75,645 tonne -- the lowest one-month total in more than 18 months.

But while the Koreans were avoiding the US market, Mexican steelmakers were not. Shipments of ferrous scrap south of the Rio Grande almost tripled to 1,50,421 tonne in July from 59,559 tonne in June, the strongest month for US scrap yards that supply to Mexicao since September 1997, when 1,76,070 tonne went south. Export yards in the New York area and elsewhere on the East Coast seemed to be the major beneficiaries of the Mexican buying rather than traditional suppliers in the Southwest.

The author is based in New Delhi and is a convenor of Steel Exporters' Forum. The views expressed are his own and do not reflect that of any government bodies he is associated with