According to the Metal Courier information agency, steel prices showed growth in some Middle East in European markets in recent weeks, as producers cut their supply. The steepest price growth has been seen in the construction steel markets in Syria and Lebanon, where the domestic prices have surged by an average USD 180-275/ton since late October. In Syria, feedstock prices have risen by 50% on average, from USD 270 to USD 410 per ton, and in Italy, imported feedstock prices have jumped 43%, from USD 300 to USD 430 per ton. In Iranian ports, prices for imported stock materials have increased by 28% to USD 460 per ton. A revival is also being observed in other markets, including those in the CIS.
Feedstock prices are traditionally looked upon as a predictive indicator on the steel market. We therefore, expect the resumption of growth in rolled steel prices across the board, with the exception of feedstock for machinery producers. The rally in prices should primarily benefit the makers of section steel for Middle East and Asian builders. We expect the resumption of a rally in domestic metal prices closer towards the end of the year. In Russia, growth in steel prices may resume closer towards the end of the year. We expect the forthcoming rally to primarily benefit long product makers, such as Mechel and Evraz, while the Novolipetsk Iron & Steel Works, Russia’s leading crude steel maker, stands to benefit the most from the rally in feedstock prices.
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