steel: market tracker - metal bulletin · 2013-07-16 · 2 steel: weekly market tracker april 2013...

Steel: Market TrackerInternational market analysis of flat and long steel products

Issue 210April 201324 April 2013www.metalbulletinresearch.com

ContentsGlobal flat, long product prices 2Steel price forecasts 4Steel price analysis 5 Flat product market analysis 6Global flat product supply statistics 10EU steel prices 11Long product market analysis 12Global long product supply stats 15Raw material price focus 16Steel futures focus 20 Regional FocusMiddle East 18

lThe coil market in the USA continues to defy steelmakers’ attempts to increase prices, but plate prices have begun to look firmer this month. So far, despite the threat of an accelerated programme for the reduction of the federal deficit, consumption levels are holding up, especially in the two biggest markets for steelmakers, automotive and construction. In spite of their experience of weak prices in over-supplied markets some US steelmakers are preparing to expand flat product capacity to serve what they expect to be a boom in pipe production for shale gas projects.

lA month from the shaky bail out of Cyprus the Eurozone is looking no more secure, and EU steelmakers are still suffering from the effects of austerity measures. Prices fall, as they do in the USA, but there is no sign of even the modest growth in demand experienced across the Atlantic. The end of the extended winter has provided only a limited seasonal improvement, mainly to construction based products; demand from manufacturing industry still lags. A judicial block on the release of coil from the giant ILVA works has done nothing to improve southern market coil balances.

lChinese steelmakers are still raising output ahead of real orders; the ripples spread to neighbouring markets and undermine prices there. Every week seems to bring news of more anti-dumping investigations, although Chinese exporters are not the only targets; Korean steelmakers have been scrutinised as well, although threats of petitions from US flat product and pipe mills have so far not been substantiated. Japanese steelmakers see the first results of the plunge in the value of their currency, and look forward to some large yen-based price rises at home, while pocketing higher profits from dollar-designated business abroad.

l Modest price rises in USA l EU mired in austerity, hurting steel industryl Prices to be hit by destocking but are near lows

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Global long Index Global flat Index Global steel price index

MBR’s Steel Price IndicesNew-year rally has been completely undone in April, following a sharp fall in the past week

Source: Metal Bulletin Research

Important information

This publication is afree sample issue.You need the latest publication to give you:l Long-term and short-term trading forecasts for slabs, billets, hot-rolled sheet/coil,

cold-rolled sheet/coil, plates, HDG, debars and wire rods.

l Expert reactions to the very latest steel industry events, from all over the globe.

l Analysis of the flat and long product market, focused on specific regions includingemerging markets.

l A steel futures report, covering LME, SHFE and SSEC contracts.

l Two-year quarterly pricing and demand forecasts by region for key products.

www.metalbulletinresearch.com/steel

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2 Steel: Weekly Market Tracker April 2013

Metal Bulletin Research

Global flat product prices Latest monthly Year-on-year

Unit Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 % change Apr-12 % change

Slab US import (CFR) $/tonne 513 513 534 549 555 525 -5% 634 -17%

Russian export (FOB) $/tonne 466 466 507 517 510 482 -6% 582 -17%

Ukrainian export (FOB) $/tonne 421 421 458 468 468 442 -6% 526 -16%

Brazil export (FOB) $/tonne 473 473 494 509 515 485 -6% 594 -18%

S.E. Asia import (CFR) $/tonne 540 540 570 583 540 510 -6% 656 -22%

HR Coil US domestic (EXW) $/tonne 729 724 701 695 673 650 -3% 730 -11%

US import (CFR) $/tonne 619 619 611 611 611 640 5% 703 -9%

Brazil domestic (EXW) $/tonne 721 721 767 793 787 679 -14% 879 -23%

Latin America export (FOB) $/tonne 550 550 585 605 600 600 0% 670 -10%

EU Southern domestic (EXW) €/tonne 440 455 488 503 495 473 -5% 536 -12%

EU Southern domestic (EXW) $/tonne 571 601 650 667 640 617 -4% 708 -13%

EU Northern domestic (EXW) €/tonne 455 478 493 513 505 483 -4% 550 -12%

EU Northern domestic (EXW) $/tonne 590 631 657 681 653 631 -3% 708 -11%

EU Northern import (CFR) €/tonne 475 483 510 490 480 473 -2% 555 -15%

EU Northern import (CFR) $/tonne 616 637 680 651 621 617 -1% 733 -16%

EU Southern import (CFR) €/tonne 450 460 468 490 480 480 0% 540 -11%

EU Southern import (CFR) $/tonne 583 608 623 651 621 627 1% 713 -12%

Japan domestic (ex-warehouse) ¥/tonne 55,068 53,233 53,233 55,000 65,000 65,000 0% 58,740 11%

Japan domestic (ex-warehouse) $/tonne 670 632 596 588 683 663 -3% 725 -9%

Japan export (FOB) $/tonne 544 563 563 590 640 620 -3% 647 -4%

China domestic (ex-warehouse) Rmb/tonne 3,811 3,904 4,062 4,035 3,958 3,800 -4% 4,239 -10%

China domestic (ex-warehouse) $/tonne 613 626 653 647 637 615 -3% 672 -9%

China export (FOB) $/tonne 532 540 578 582 588 553 -6% 632 -13%

South Korea domestic (EXW) ₩/tonne 700,321 700,321 700,322 730,000 730,000 730,000 0% 964,209 -24%

South Korea domestic (EXW) $/tonne 623 630 662 673 656 652 -1% 818 -20%

South Korea export (FOB) $/tonne 592 592 593 589 600 600 0% 731 -18%

India domestic (EXW) Rs/tonne 33,157 34,175 34,175 35,168 33,750 34,750 3% 36,261 -4%

India domestic (EXW) $/tonne 601 623 628 652 622 642 3% 690 -7%

India export fob $/tonne 546 571 607 632 598 593 -1% 672 -12%

Vietnam (CFR) $/tonne 610 616 637 650 642 624 -3% 743 -16%

Russian domestic (EXW) $/tonne 545 513 513 518 524 507 -3% 651 -22%

Russia export (FOB) $/tonne 544 523 596 580 580 540 -7% 649 -17%Ukraine export (FOB) $/tonne 528 558 558 568 568 525 -8% 624 -16%

Turkey domestic (EXW) $/tonne 553 580 624 624 628 595 -5% 688 -14%

Poland domestic (EXW) $/tonne 650 650 650 650 650 650 0% 815 -20%

Poland import (CFR) $/tonne 698 698 698 698 698 698 0% 776 -10%

Iran domestic (EXW) Irr/tonne 21.30 17.98 21.40 21.70 19.88 20.48 3% 11 80%

Iran import (CFR) $/tonne 1898 1602 1907 1934 605 595 -2% 1,011 -41%

Dubai import (CFR) $/tonne 571 571 635 635 633 605 -4% 681 -11%

CR coil US domestic (EXW) $/tonne 813 807 785 794 783 761 -3% 867 -12%

US import (CFR) $/tonne 740 784 784 784 783 772 -1% 839 -8%

Latin America (FOB) $/tonne 765 766 766 767 768 769 0% 860 -11%

EU Northern domestic (EXW) €/tonne 560 575 575 585 580 583 0% 627 -7%

EU Northern domestic (EXW) $/tonne 726 760 767 777 750 761 2% 832 -9%



EU Northern import (CFR) €/tonne 540 540 540 550 545 545 0% 640 -15%

EU Northern import (CFR) $/tonne 700 713 720 730 705 712 1% 845 -16%



Japan domestic (ex-warehouse) ¥/tonne 80,225 76,449 76,449 76,450 80,000 80,000 0% 80,225 0%

Japan domestic (ex-warehouse) $/tonne 976 908 856 817 841 816 -3% 990 -18%





South Korea domestic (EXW) ₩/tonne 860,000 800,000 800,000 820,000 820,000 820,000 0% 1,027,940 -20%

South Korea domestic (EXW) $/tonne 793 746 756 756 737 732 -1% 904 -19%

South Korea export (FOB) $/tonne 810 810 810 810 810 810 0% 788 3%

India domestic (EXW) Rs/tonne 38,883 39,612 38,750 38,750 38,250 38,750 1% 42,285 -8%

India domestic (EXW) $/tonne 765 768 713 715 704 716 2% 804 -11%

Russia domestic (EXW) $/tonne 683 650 644 655 635 625 -2% 837 -25%

Russia export (FOB) $/tonne 578 601 618 671 668 640 -4% 698 -8%

Ukraine export (FOB) $/tonne 549 571 587 642 628 610 -3% 663 -8%

Poland domestic (EXW) $/tonne 698 666 628 633 648 638 -2% 916 -30%

Poland import (CFR) $/tonne 673 633 677 713 708 668 -6% 810 -18%

HDG US domestic (EXW) $/tonne 869 864 843 853 853 842 -1% 925 -9%

US import (CFR) $/tonne 917 917 917 917 917 917 0% 917 0%

Latin America export (FOB) $/tonne 765 765 765 770 760 740 -3% 820 -10%









Japan domestic (ex-warehouse) ¥/tonne 125,000 125,000 125,000 125,000 124,000 124,000 0% 125,000 -1%

Japan domestic (ex-warehouse) $/tonne 1,521 1,484 1,399 1,337 1,303 1,265 -3% 1,543 -18%





India domestic (EXW) Rs/tonne 41,215 42,179 44,250 44,250 44,250 45,250 2% 43,866 3%

India domestic (EXW) $/tonne 807 810 814 816 815 836 3% 834 0%

India export (FOB) $/tonne 729 779 805 840 803 795 -1% 879 -10%

Iran import (CFR) $/tonne 935 936 936 937 938 939 0% 867 8%

Dubai import (CFR) $/tonne 793 833 820 838 813 798 -2% 889 -10%

Plate US domestic (EXW) $/tonne 679 739 739 709 741 816 10% 933 -13%

US import (CFR) $/tonne 1,102 1,105 965 965 965 965 0% 1,071 -10%

Latin America export (FOB) $/tonne 635 635 665 665 650 620 -5% 790 -22%



EU Southern domestic (EXW) €/tonne 455 455 500 493 493 495 1% 582 -15%

EU Southern domestic (EXW) $/tonne 590 601 667 654 637 647 2% 768 -16%





Japan domestic (ex-warehouse) ¥/tonne 77,638 76,691 76,692 76,700 78,000 78,001 0% 81,426 -4%

Japan domestic (ex-warehouse) $/tonne 945 911 859 820 820 796 -3% 1,005 -21%

Japan export (FOB) $/tonne 846 849 851 851 850 850 0% 815 4%

Chinese domestic (ex-warehouse) Rmb/tonne 4,293 4,293 4,085 4,163 3,983 3,893 -2% 4,476 -13%


Russia export (FOB) $/tonne 551 551 575 575 585 585 0% 654 -11%

Ukraine export (FOB) $/tonne 529 529 552 552 565 570 1% 628 -9%Source: Metal Bulletin Research. For complete set of prices please refer to the data download sheets relating to this report

April 2013 Steel: Weekly Market Tracker 3


Global long product prices Latest Monthly Year-on-YearUnit Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 % change Apr-12 % change

Billet Russia export (FOB) $/tonne 508 535 533 528 513 -3% 605 -15%Ukraine export (FOB) $/tonne 498 525 523 518 503 -3% 595 -16%Turkey domestic (EXW) $/tonne 545 558 548 560 540 -4% 635 -15%Turkey import (CFR) $/tonne 535 543 553 548 525 -4% 635 -17%Turkey export (FOB) $/tonne 543 553 553 555 545 -2% 635 -14%Iran import (CFR) $/tonne 595 575 575 575 565 -2% 685 -18%GCC import (CFR) $/tonne 538 550 580 580 570 -2% 670 -15%South East Asia import (CFR) $/tonne 563 580 578 575 570 -1% 650 -12%Latin America export (FOB) $/tonne 525 540 540 540 525 -3% 610 -14%

Rebar Russia domestic (EXW) RUB/tonne 18,128 18,120 17,120 17,040 16,995 0% 0 -Russia domestic (EXW) $/tonne 589 599 569 555 548 -1% 668 -18%Ukraine domestic (EXW) UAH/tonne 5,520 4,580 4,580 4,580 5,468 19% 0 -Ukraine domestic (EXW) $/tonne 688 572 580 580 693 19% 658 5%CIS export (FOB) $/tonne 585 610 605 590 583 -1% 650 -10%Turkey domestic (EXW) $/tonne 605 620 605 615 610 -1% 673 -9%Turkey export (FOB) $/tonne 598 608 613 610 595 -2% 673 -12%GCC import (CFR) $/tonne 615 635 630 630 605 -4% 690 -12%Iran import (CFR) $/tonne 645 635 645 645 645 0% 728 -11%Iran export (FOB) $/tonne 593 606 621 611 602 -1% 679 -11%USA domestic (EXW) $/tonne 750 750 750 739 761 3% 838 -9%USA import (CFR) $/tonne 634 634 634 634 634 0% 785 -19%Latin America export (FOB) $/tonne 600 610 615 615 610 -1% 680 -10%Northern EU domestic (EXW) €/tonne 545 540 518 493 505 3% 540 -6%Northern EU domestic (EXW) $/tonne 720 720 687 637 660 4% 713 -7%Southern EU domestic (EXW) €/tonne 500 498 485 475 473 -1% 540 -13%Southern EU domestic (EXW) $/tonne 660 663 644 614 617 1% 713 -13%Northern EU import (CFR) €/tonne 495 495 490 488 488 0% 548 -11%Northern EU import (CFR) $/tonne 654 660 651 630 637 1% 723 -12%Southern EU import (CFR) €/tonne 485 485 478 463 463 0% 548 -16%Southern EU import (CFR) $/tonne 485 485 478 463 463 0% 548 -16%Southern EU import (CFR) $/tonne 641 647 634 598 604 1% 723 -16%Southern EU export (FOB) $/tonne 625 640 634 608 608 0% 670 -9%China domestic (DAP) RMB/tonne 3,693 3,770 3,873 3,795 3,720 -2% 4,285 -13%China domestic (DAP) $/tonne 593 606 621 611 602 -1% 679 -11%China export (FOB) $/tonne 550 585 583 550 548 0% 650 -16%Japan domestic (EXW) ¥/tonne 85,000 85,000 85,000 85,000 85,000 0% 86,000 -1%Japan domestic (EXW) $/tonne 1,009 952 909 893 867 -3% 1,062 -18%Japan export (FOB) $/tonne 660 660 660 660 660 0% 690 -4%South East Asia import (CFR) $/tonne 575 575 585 585 585 0% 675 -13%

Wire rod Russia export (FOB) $/tonne 590 610 605 598 598 0% 670 -11%Ukraine export (FOB) $/tonne 580 600 595 588 588 0% 660 -11%Turkey domestic (EXW) $/tonne 632 643 635 635 620 -2% 695 -11%Turkey export (FOB) $/tonne 605 615 613 618 605 -2% 695 -13%GCC import (FOB) $/tonne 615 625 623 628 615 -2% 710 -13%USA domestic (DAP) $/tonne 738 738 738 727 761 5% 793 -4%Northern EU domestic (EXW) €/tonne 515 543 515 490 495 1% 565 -12%Northern EU domestic (EXW) $/tonne 680 723 684 634 647 2% 746 -13%Southern EU domestic (EXW) €/tonne 510 508 495 483 478 -1% 565 -15%Southern EU domestic (EXW) $/tonne 674 677 657 624 624 0% 746 -16%Southern EU export (FOB) $/tonne 629 653 648 617 623 1% 700 -11%China domestic (DAP) RMB/tonne 3,590 3,718 3,758 3,678 3,638 -1% 4,313 -16%China domestic (DAP) $/tonne 576 598 602 592 589 -1% 684 -14%China export (FOB) $/tonne 570 590 585 540 543 0% 675 -20%Southeast Asia import (CFR) $/tonne 555 585 580 580 600 3% 690 -13%

Sections US domestic (EXW) $/tonne 860 860 788 827 843 2% 887 -5%US imports (CFR) $/tonne 815 815 815 815 816 0% 711 15%Northern EU domestic (EXW) €/tonne 635 655 628 605 600 -1% 655 -8%Northern EU domestic (EXW) $/tonne 839 873 833 782 784 0% 865 -9%Southern EU domestic (EXW) €/tonne 615 630 598 580 578 0% 655 -12%Southern EU domestic (EXW) $/tonne 812 840 793 750 755 1% 865 -13%China domestic (DAP) RMB/tonne 3,815 3,905 4,040 3,920 3,873 -1% 4,410 -12%China domestic (DAP) $/tonne 612 628 647 631 627 -1% 699 -10%Japan domestic (EXW) ¥/tonne 113,000 113,000 113,000 113,000 113,001 0% 105,000 8%Japan domestic (EXW) $/tonne 1,342 1,265 1,208 1,188 1,153 -3% 1,296 -11%Japan export (FOB) $/tonne 710 710 710 710 710 0% 830 -14%

Merchant bar US domestic (EXW) $/tonne 880 880 825 825 852 3% 981 -13%US import (CFR) $/tonne 772 772 772 772 772 0% 705 9%EU domestic (EXW) €/tonne 565 580 580 550 550 0% 600 -8%EU domestic (EXW) $/tonne 746 773 770 711 719 1% 792 -9%China domestic (DAP) RMB/tonne 3,740 3,700 3,855 3,955 3,945 0% 4,300 -8%China domestic (DAP) $/tonne 600 595 618 637 638 0% 682 -6%Japan domestic (EXW) ¥/tonne 76,000 76,000 76,000 76,000 76,000 0% 83,000 -8%Japan domestic (EXW) $/tonne 902 851 813 799 775 -3% 1,024 -24%Japan export (FOB) $/tonne 660 660 660 660 660 0% 690 -4%

Source: Metal Bulletin Research. For complete set of prices please refer to the data download sheets relating to this report



Steel forecast assumptions:

lDuring the past month, finished steel prices have continued to falter, completely undoing the gains recorded since the end of last year. In some cases, such as the US domestic hot-rolled coil (HRC) market, prices are averaging below any month since October 2012. Flat-rolled products have been generally receding more quickly than long products with HRC prices out of the USA, Russia, and Southern Europe falling 4% month-on-month in US dollar terms. The declines reflect faltering demand conditions and a steadily worsening outlook, not only in Europe but also in China, where not unusually, apparent demand conditions have far exceeded even the most bullish of independent forecasters so far this year. MBR suspects, however, that the demand growth has been inflated by excess stock building among producers and distributors and so destocking, rather like last year, is the next step. The pricing implications of this reduced purchasing are thus even more negative than we predicted last month. We have reduced our HRC price forecasts by between 3-7% this year though have no reason to reduce our more positive expectations next year when demand growth should accelerate

Steel price forecasts

Price forecasts 2011 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

US market forecastsDomestic prices, EXW, $/tonne

Plate 1,020 850 719 724 789 829 843 894 930 HR coil 802 704 682 702 646 687 739 790 809 CR coil 932 837 789 794 755 786 849 900 914 Rebar 842 788 727 746 753 757 768 780 813

EU market forecastsDomestic prices, $/tonne

Plate 938 739 674 705 692 668 710 750 760 HR coil 769 654 610 655 630 605 650 690 700 CR coil 915 762 729 749 737 710 755 795 805 Rebar 761 686 675 661 640 630 660 700 720

China market forecastsExport prices, FOB, $/tonne

Plate 700 614 609 586 549 572 595 615 625 HR coil 657 571 523 577 550 540 570 600 605 CR coil 782 666 621 658 632 625 655 685 690 HDG coil 843 731 710 723 664 655 690 712 720

Russia market forecastsExport prices, FOB, $/tonne

Slab 661 541 481 504 487 481 500 540 555 Billet 532 532 532 532 510 520 540 555 555 Plate 752 617 551 572 564 553 570 612 630 HR coil 711 602 545 578 545 545 565 605 620

Turkish export market forecasts Export prices, FOB, $/tonne

Billet 653 586 540 553 530 530 560 610 609 Rebar 694 630 593 610 613 600 610 660 660

Source: MBR. *Forecasts are period averages, spot prices

Consumption forecasts ('000 tonnes) 2012 2013 2015

US consumption forecastsHR coil consumption forecast 23,462 25,926 26,740 Rebar consumption forecast 6,605 7,221 6,739

EU consumption forecastsHR coil consumption forecast 45,178 27,593 42,647 Rebar consumption forecast 13,684 12,754 13,119

China consumption forecastsHR coil consumption forecast 155,350 162,098 178,212 Rebar consumption forecast 105,328 101,908 109,894

Russia consumption forecastsHR coil consumption forecast 8,206 8,866 9,437 Rebar consumption forecast 3,222 3,425 4,915

Turkey consumption forecastsRebar consumption forecast 5,269 5,167 5,779

Source: MBR. *Forecasts are annual averages

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HRconsumption actual and forecast ('000 tonnes)

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Rebar consumption actual and forecast ('000 tonnes)

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Steel Price Analysis

Transatlantic differences There are interactions between the markets of the EU and the USA, sometimes very close, but there are also persistent differences. The charts show the differences, in US dollars between average prices in the EU and prices in the Midwest since the recession. The curves show US prices less EU prices, so EU prices were at a premium when the curve is negative. They are of interest not only for showing the differences across the Atlantic in individual products, but also how differences are greater or less between products.

Coil prices – HR coil and HDG The opening period of US material being at a discount to that in the EU reflected the strong euro, but the two premiums moved more or less in step. US prices moved back to a premium when the euro weakened against the dollar, but later the exchange rate seems to have had little bearing on the premium. For almost all the time HDG was at a much greater premium than HR coil. HDG was at less of a discount than HR coil later, and when EU prices were mostly higher than US prices HDG briefly hit a premium (in the middle of 2010) when HR coil was at a deep discount. Only briefly, in the middle of 2011, was this pattern disturbed. After US prices fell there was still an HDG premium in the second quarter and fourth quarter of 2012.

This price pattern is no surprise. The USA usually runs a trade deficit in HR coil. Domestic mills import large tonnages for re-rolling and are glad to import supplies at competitive world prices or even below prevailing world prices. Import price competition in a downstream, value-added product such as galvanised coil is another matter. If necessary US mills call for anti-dumping investigations against low-priced supplies. Mostly it is not necessary. Foreign suppliers may be ready to cut margins to clear stocks abroad, but find the disruption caused to trade by an anti-dumping investigation a serious deterrent.

Long product prices These have a much more confused pattern; prices switch between having higher and lower premiums and the two premiums run for periods on equal terms. Initially the Eurozone’s bursting property bubbles had more impact on EU prices than the housing collapse had on US prices, and the exchange rate seems to have had little effect. The US premiums since the fourth quarter of 2011 reflect internal US conditions rather than the strength of the dollar – which is why there is still a maverick fall in the sections premium before the most recent rise.

US - EU price differences Long products


US - EU price differences HR coil and HDG


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Flat Product Analysis

l Excess supply still hinders US coil price rises but plate prices have made gainsl Forecasts of falling demand depress prices in the EU l Chinese steelmakers continue to suffer – and inflict suffering - with overproduction

US market – wrong momentumEvery attempt by US coil mills to get some upward momentum into prices seems to result in another price fall; at this rate the falls develop a momentum of their own, in the wrong direction. When service centres and end-users are already cautious about the market outlook they are not likely to stock up with steel if they can expect lower prices a week or a fortnight later. Hence coil stocks in the distribution system remain low, with cover for deliveries consistently around 2.3-2.4 months.

Severstal North America has issued new minimum base prices of $32/UScwt ($705/tonne) for hot-rolled bands and $37/UScwt ($816/tonne) for cold-rolled and galvanized coils effective April 22, with most HR coil deals reported at less than $30/UScwt ($661/tonne) and CR coil is on offer at $34.50/UScwt ($761/tonne). The mills’ old trick of announcing a price rise a month hence to stimulate advance buying ahead of the increase no longer works; it requires a heroic suspension of disbelief on the part of customers to pay the asking price. Disbelief is compounded by the knowledge that mills, operating at low rates, offer lead times of a week or two and readily offer discounts for modest quantities.

Market Outlook Supply In the USA low operating rates will be adequate to match general industrial expansion while the short lead times resulting from spare capacity will help to keep down import demand. In the EU supply depends almost wholly on domestic output as markets will remain effectively secure from import competition, and domestic output is likely to be below 2012 levels. In China steelmakers are likely to continue to raise output ahead of demand and contribute to oversupply among trading partners.

Demand The US market remains fragile but looks likely to continue to grow modestly. EU steelmakers can expect only another year of stagnation or decline. Asian markets will continue to grow steadily, even if not fast enough to neutralise the effects of Chinese over-production.

Outlook There are possibilities that prices will recover from the end of the year, but in the meantime further price falls cannot be ruled out.

Key prices This week Next monthChina HRC ($/tonne) 615 -3%

USA HRC ($/tonne) 650 -3%

EU Northern HRC ($/tonne) 631 0%

EU Southern HRC ($/tonne) 617 -3%

Russia HRC ($/tonne) 540 -3%

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Apr12

May12

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Sep12

Oct12

Nov12

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Source: MBR

HRC prices ($/tonne)

China Domestic (Ex-warehouse)

EU Northern HRC ($/tonne)

Vehicle output: US recovery contrasts with EU stagnation

Sources: USBEA,Eurostat

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US '000units EU27 index

France: Industrial Production Index Data and 12-month average

Source: NISES France

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Unadjusted Smoothed



Steelmakers are frustrated because they are obliged to absorb cost rises and see some of their customers enjoying brisk business, most obviously vehicle manufacturers. Some are calling last month’s sales their best results for March for years after reporting total sales of 1.25m units, 3.2% higher than in March 2012. This was the culmination of a run of good results that took sales during the first quarter to almost 3.2m units, 6.4% higher than a year earlier.

Pick-up sales hitting pre-recession levelsGeneral Motors reports that it was the best since March 2009, after the financial crisis began but before the full effects hit the US economy. Moreover, the biggest gains were made in utility or pick-up vehicles, which are more intensive steel users than are ordinary passenger cars. GM results included a 21% year-on-year rise in sales of full size pick-ups. Ford reported its best overall March sales since 2008, and its best first quarter pick-up sales since 2007. Monthly sales of these have out-performed group forecasts by a third.

Although some of these utility vehicles are used for leisure, the majority are workhorses, so rising sales usually indicate increasing business activity, particularly in the construction sector. Until now growth has been concentrated in the residential market – which should be another reason for improved coil business – directly for garage doors, secure entrance doors and for heating and ventilation ducts; indirectly for household appliances. Demand in these applications is higher, but the increases have not been enough to liven up the market.

US plate markets catch upAfter disappointment at the beginning of the year, when their bid for massive price rises was effectively disregarded, US plate mills have had a better first quarter than coil producers. At the beginning of the month they made some headway towards their earlier price targets. This may be partly due to temporary effects such as SSAB’s planned maintenance shutdown, but the market is generally tighter; in contrast with the ultra-short lead times in the coil market, plate mills are offering delivery in 5-6 weeks.

Distribution stocks of plate look more ample than coil, but they came down from over 3 months cover to less than 3 months this year, which counts as tight for plate. Higher cover for plate than coil is partly a reflection on the longer time service centres have to wait for new deliveries, and partly due to the variety of product specifications that have to be matched in the plate market.

Nevertheless, after the experiences of the past two or three years, and the prospect of stagnation as higher taxes and lower federal spending take effect, dealers do not rule out a reversal of fortune before the year is over. This attitude has helped to keep down import orders; there was a surge of arrivals in February - 86,319 tonnes of discrete plate - but the tonnage was said to be linked to specific projects. Licence applications for March amounted to 53,186 tonnes. More capacity plannedDespite continued uncertainty some steelmakers are talking of expanding capacity, whether for coil or plate. Nucor Corporation plans to expand, hoping to supply new and expanded pipe capacity being built to serve the shale gas business. Apart from a downstream pipe development by the Evraz plate mill, European tube specialists are planning US pipe mills – Tenaris of Luxembourg will construct a 600,000 tpy mill in Texas, Benteler Steel from Germany plans a large OCTG unit in Louisiana.

Nucor had better be sure that shale gas projects will buy their supplies from US pipe mills. At present rising demand from shale gas projects is sucking in imports of pipe and OCTG, and pipe mills elsewhere in the world are raising their capacity with their sights on shale requirements. South Korea is by far the most important overseas supplier to the USA. It landed 97,785 tonnes of OCTG and 79,429 tonnes of line pipe at US ports in January.



Indications that exports from Korea could increase further have prompted talk that its producers should be investigated for suspected dumping, but after weeks of rumours nothing has emerged. This may be because it will be a very difficult case to prove. Korean pipe mills have cheap coil and plate (because of recent overinvestment) but no subsidies, and operate very efficient manufacturing lines that pay high wages.

EU mired in austerityFollowing the tangled rescue of Cyprus Eurozone governments congratulated themselves on surviving another episode in the permanent crisis, but have proved, collectively, to be unable to develop a formula that combines economic growth with a return to fiscal health. It is unfortunate for the French government, which must now watch its own economy suffer for lack of stimulus. Even the IMF is now alarmed at the excessive concentration of austerity measures among EU governments without adequate efforts to stimulate economies to grow out of recession.

Hence steelmakers in the EU have a similar price experience to those in the USA but lack the consolations of rising demand, however modest. There was a fall of almost 10% in EU apparent steel consumption in 2012; this may overstate the fall in real consumption, since there was extensive de-stocking during the year, but it is clear that real consumption fell, particularly in the latter half of the year, as output fell in steel-using industries.

EU carmakers sufferThe contrast between the US vehicle industry and vehicles in the EU is particularly striking. The index covering output in the EU 27 shows, amid fluctuations, a downward trend since the beginning of last year. After the crash sales recovered initially, stimulated by scrap-and-purchase subsidies, but whereas the US economy recovered and maintained demand for vehicles after the government’s “cash for clunkers” ended, there has been no corresponding recovery in consumer spending in the EU.

Closures of long-established car factories are continuing, overdue adjustments forced on companies by the recession. Germans have been shocked to learn that General Motors, which has been losing money in Europe for many years, plans to close the Opel works in Bochum. This is the first permanent shutdown of a car factory in Germany for decades, and in a town already hit by closures of coal mines and steelworks.

Wide north-south price gapEU crude steel output has been cut; it fell by 5% in 2012, but this has not been enough to re-balance the market and worsening prospects are making more cuts necessary. It seems that as fast as steelmakers cut production to match demand, demand falls again. After signs of price recovery in March HR coil prices have slipped back again below €500/tonne ($654/tonne), and are as low as €470/tonne ($614tonne) in Italy. Downstream the north-south gap widens; CR coil in northern markets costs up to €95/tonne more ($124/tonne) compared with €75/tonne ($98/tonne) in southern markets. In the north, HDG producers struggle to obtain a mark-up over CR coil; in the south they struggle to minimise discounts of HDG to the CR coil price.

The legal wrangle over Riva’s ILVA works in Taranto, southern Italy, continues. The government edict rushed through to allow production to continue has survived legal challenge, so it can continue to operate while rectifying the worst of its emission violations, which eases earlier fears of the customers of the large works. At the same time a side action has prevented the administrators from marketing the finished products sequestered at the start of the

Japan - Regional exports ASEAN overtakes Taiwan & Korea

Source: JISF

0 5 10 15

China

ASEAN

NIE*

Other EAsia

Mn tonnes

FY 2012 FY 2011

‘*S Korea, Taiwan, Singapore, Hong Kong



process, so the fear that a flood of coil will suddenly be released on to the fragile market has also been dispelled. The market remains weak nevertheless.

Another crude steel production record in ChinaDeterred neither by the failure of orders to recover on schedule nor by falling prices, Chinese steelmakers set another new record for daily crude steel output in the opening days of April. Production during the first 10 days is estimated to have reached 2.124m tonnes, easily exceeding the previous record, 2.08m tonnes, set only a month before. In the first quarter finished steel exports reached 14.43m tonnes, 18.8% more than in the first quarter last year. A fall in imports – 5.3% lower than a year before, at 3.23m tonnes – raised the first quarter export surplus to 11.2m tonnes. Net disposals on this scale are not enough to compensate for excess stocks and high output, and coil and plate prices are down since last month.

Steelmakers have yet to adjust to the fact that steel demand is not growing as fast as they would like, but there have been strong advances. The car industry offered some good news to steelmakers by seeming in March at last to have burst convincingly through the monthly output total of 2m units after fluctuating indecisively below that level since 2010, with a 50% rise over February – not surprising given the New Year holiday effect – and, more significantly, a rise of nearly 11% over March 2012. Moreover, first quarter figures show that, unlike the steel industry, the Chinese car industry has been matching output closely to sales lately. At 5.42m units, sales were 13.2% higher than in the first quarter of 2012, while production rose slightly more slowly, by 12.8% year on year, to 5.4m units.

Regional effectsThe new factor affecting pricing around the region that has been added to the constant story of Chinese overproduction is the success of the Japanese government in bringing down the value of the yen. Exporters in South Korea and Taiwan began to price supplies to Japan in yen some years ago, and enjoyed windfall profits as the currency rose. Now they are hastily raising their yen asking prices to compensate for exchange rate changes. For February-April shipments of coil to Japan, China Steel Corporation (CSC) raised its prices by Y3-5/kg ($30-51/tonne). This month it announced that May-July deliveries would on average cost Y7/kg ($71/tonne) more.

This, together with similar yen-based price rises from Korean exporters, is good news for Japanese steelmakers. They have announced a programme of steady price rises from now onwards. Some of the increase will, of course, do no more than compensate for the higher yen cost of dollar-denominated raw materials supplies, but on balance companies will improve their long eroded profit margins.

The story of Taiwan’s internal prices, assailed by cheap imports, is different. These are sensitive to the flood of Chinese coil exports. CSC lists prices for two month periods. It is cutting June-July flat product prices by an average of just over 2%; HR coil will come down by NT$697/tonne ($23/tonne), downstream products by rather less – EZ comes down by NT$500/tonne ($17/tonne). Plate prices, which had been weak earlier, are being marked down less, by NT$438/tonne ($15/tonne). In response to a petition from the island’s coil producers the International Trade Commission of Taiwan’s Ministry of Economic Affairs has found that the impact on the Taiwan market of cheap CR coil imports from China and South Korea - which rose as a share of the total import market from 38% in 2009 to 70.7% in 2012 – justifies considering erecting a temporary tariff.

China - Vehicle output Millions of units

Source: CAAM

0.0

0.5

1.0

1.5

2.0

2.5

Mar

10

Sep

10

Mar

11

Sep

11

Mar

12

Sep

12

Mar

13



Flat product shipment, production, net exports and apparent consumption statistics ('000 tonnes)Q3 12 Q4 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13

USA HR coil Shipment 5,011 4,930 1,664 1,719 1,798 1,494 1,670 1,654 1,606 - Net exports 352- 334- 123- 160- 72- 120- 117- 103- 113- - App. Con. 5,363 5,264 1,787 1,879 1,871 1,614 1,788 1,757 1,719 -

Plate Shipment 2,100 1,988 763 725 715 660 607 650 731 - Net exports 158- 168- 41- 36- 60- 62- 53- 58- 57- - App. Con. 2,258 2,156 804 762 775 721 660 708 789 -

CR coil Shipment 2,546 2,292 878 862 881 803 869 721 702 - Net exports 53- 58- 16- 7- 26- 19- 18- 21- 19- - App. Con. 2,599 2,583 894 869 907 823 866 865 851 -

HDG Shipment 3,255 3,070 1,135 1,083 1,141 1,031 1,060 999 1,011 1,256 Net exports 171- 166- 43- 64- 53- 53- 57- 54- 55- - App. Con. 3,426 3,405 1,178 1,147 1,194 1,085 1,142 1,140 1,122 -

EU Flats products Production 19,856 17,543 6,902 6,583 5,840 7,433 6,990 6,464 4,089 - Net exports 1,329 897 265 253 570 506 325 587 15- - App. Con. 18,527 16,646 6,637 6,330 5,270 6,927 6,665 5,877 4,104 -

China HR coil Production 72,074 72,194 24,810 24,588 24,050 23,436 24,106 23,481 24,607 - Net exports 149- 136- 45- 49- 49- 52- 40- 56- 40- - App. Con. 72,223 72,330 24,855 24,637 24,099 23,488 24,146 23,537 24,647 -

Plate Production 16,355 15,017 6,120 5,807 5,112 5,436 5,243 4,669 5,105 - Net exports 439- 327- 115- 157- 131- 151- 136- 96- 95- - App. Con. 16,794 15,344 6,235 5,964 5,243 5,587 5,379 4,765 5,200 -

CR coil Production 17,652 19,000 5,933 5,766 5,993 5,893 6,333 6,407 6,260 - Net exports 55- 256 143 27 76- 6- 134 61 62 - App. Con. 17,707 18,744 5,790 5,739 6,069 5,899 6,199 6,346 6,198 -

Galvanised coil Production 9,573 9,477 3,470 3,309 3,232 3,032 3,093 3,219 3,165 - Net exports 861 1,027 380 297 244 320 289 358 381 - App. Con. 8,712 8,450 3,090 3,012 2,988 2,712 2,804 2,861 2,784 -

Japan HR coil Production 13,036 8,183 4,241 4,331 4,483 4,222 4,208 3,975 - - Net exports 1,507 1,685 484 494 521 493 440 609 636 - App. Con. 11,529 6,498 3,757 3,837 3,962 3,729 3,768 3,366 636- -

Plate Production 3,283 3,049 1,131 1,132 1,109 1,042 1,006 1,058 985 - Net exports 1,522 1,329 503 556 493 473 413 418 498 - App. Con. 1,421 1,374 524 458 516 447 465 530 379 -

CR coil Production 6,188 5,595 2,001 2,065 2,095 2,028 1,977 1,838 1,780 - Net exports 616 491 188 192 237 187 151 150 189 - App. Con. 5,572 5,104 1,813 1,873 1,858 1,841 1,826 1,688 1,591 -

HDG Production 3,201 2,912 1,023 1,070 1,068 1,063 1,010 968 934 - Net exports 737 689 229 257 237 242 214 250 225 - App. Con. 2,464 2,223 794 813 831 821 796 718 709 -

S. Korea HR coil Production 9,200 9,049 3,067 3,134 3,125 2,941 3,069 2,861 3,119 - Net exports 419 366 91 128 121 170 172 75 119 - App. Con. 8,781 8,683 2,976 3,006 3,004 2,771 2,897 2,786 3,000 -

Plate Production 2,589 2,385 823 901 864 824 816 795 774 - Net exports 172- 49- 46- 118- 27 82- 95- 7 39 - App. Con. 2,761 2,434 869 1,019 837 906 911 788 735 -

CR coil Production 2,479 2,436 809 820 852 807 822 787 827 - Net exports 908 968 306 289 341 278 308 310 350 - App. Con. 1,374 1,381 457 457 458 459 460 460 461 -

HDG Production 2,303 2,353 812 778 772 753 777 788 788 - Net exports 443 453 136 151 162 131 131 167 156 - App. Con. 1,860 1,900 676 627 610 622 646 621 632 -

Russia HR coil and plate Production 4,454 4,116 1,389 1,558 1,454 1,442 1,402 1,303 1,411 1,521 Net exports 1,171 821 500 410 394 368 248 277 296 371 App. Con. 3,283 3,295 889 1,149 1,059 1,075 1,155 1,026 1,115 1,150

CR coil Production 1,349 1,329 419 428 474 447 457 424 447 464 Net exports 284 267 109 93 116 75 100 73 94 104 App. Con. 1,065 1,061 309 336 358 372 357 351 353 359

HDG Production 637 617 190 206 209 222 225 195 197 198 Net exports 160- 103- 54- 46- 59- 55- 48- 31- 24- 8- App. Con. 798 720 244 252 268 277 273 226 221 205

India HRC, sheet, skelp Production 3,371 3,078 1,088 1,015 1,235 1,121 1,008 1,119 951 - Net exports 53 141- 127- 18- 30 41 49- 65- 26- 206- App. Con. 3,318 3,218 1,215 1,033 1,204 1,081 1,057 1,184 978 206

Plate Production 1,146 1,164 373 374 389 383 403 392 370 - Net exports 55 36 93- 35- 33 57 17- 31 23 - App. consumption 1,091 1,128 466 409 356 326 420 361 347 -

CR coil Production 1,495 1,640 582 495 462 539 602 484 554 - Net exports 214- 228- 92- 89- 68- 58- 49- 89- 90- - App. Con. 1,710 1,868 674 583 529 597 651 573 644 -

HDG Production 1,288 1,287 382 425 436 427 445 433 409 - Net exports 287 239 80 84 100 103 88 69 81 - App. Con. 1,001 1,048 301 341 336 325 357 363 328 -

Brazil HR coil Production 1,192 1,235 416 416 379 396 438 387 411 - Net exports 57 120 25 16 27 14 21 35 64 - App. Con. 1,135 1,115 391 401 352 382 417 352 347 -

CR coil Production 775 888 241 271 246 258 314 313 262 - Net exports 83- 57- 51- 28- 30- 25- 1 42- 16- - App. Con. 858 945 292 299 276 283 313 355 278 -

HDG Production 470 575 172 156 158 157 192 206 177 - Net exports 56- 7- 28- 16- 26- 15- 1 1- 6- - App. Con. 527 582 201 171 184 172 191 208 184 -

Source: Metal Bulletin Research; numbers in italics are estimates



EU steel flat product price comparisonSep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 m-o-m % y-o-y % May-13 f Jun-13 f Jul-13 f#DIV/0!

HR Coil Germany €/t 515 500 475 478 493 500 510 480 -6% -13% 480 490 490US$/t 667 650 610 627 654 670 663 627 -5% -13% 628 641 641

France €/t 515 500 475 478 493 500 510 480 -6% -13% 480 490 485US$/t 667 650 610 626 653 669 663 627 -5% -13% 627 641 634

Italy €/t 485 465 440 455 485 485 505 470 -7% -13% 470 470 470US$/t 627 604 565 596 643 649 656 614 -6% -14% 614 614 615

UK £/t 420 415 395 390 405 425 435 410 -6% -12% 410 415 420US$/t 680 668 631 629 646 663 656 628 -4% -16% 625 633 640

Spain €/t 485 465 440 455 485 485 500 475 -5% -12% 475 475 470US$/t 627 604 565 596 643 649 650 620 -5% -13% 621 621 615

CR Coil Germany €/t 600 585 560 573 573 575 585 575 -2% -7% 575 580 580US$/t 777 760 719 751 760 770 761 752 -1% -7% 752 759 759

France €/t 600 585 560 573 568 575 585 575 -2% -7% 575 585 580US$/t 777 760 719 750 753 770 760 751 -1% -7% 752 765 759

Italy €/t 575 575 525 545 560 560 575 545 -5% -8% 545 565 565US$/t 744 747 674 714 742 750 747 712 -5% -9% 712 739 739

UK £/t 480 475 450 465 475 490 500 485 -3% -4% 485 490 495US$/t 777 765 718 750 758 764 754 743 -1% -8% 740 747 755

Spain €/t 575 575 525 545 560 560 575 550 -4% -8% 550 570 565US$/t 744 747 674 714 742 750 747 718 -4% -8% 719 745 739

HDG coil Germany €/t 605 595 570 576 588 585 585 575 -2% -12% 580 590 595US$/t 784 773 732 755 780 784 761 752 -1% -12% 759 772 779

France €/t 605 595 570 576 583 585 585 575 -2% -12% 580 595 595US$/t 784 773 732 754 773 783 760 751 -1% -12% 758 778 778

Italy €/t 560 545 520 535 560 560 560 530 -5% -19% 540 565 565US$/t 725 708 667 701 742 750 728 692 -5% -20% 706 739 739

UK £/t 485 480 460 470 490 500 500 490 -2% -9% 490 500 500US$/t 785 773 734 758 782 780 754 751 0% -13% 747 763 762

Spain €/t 560 545 520 535 560 560 560 535 -4% -18% 540 570 565US$/t 725 708 667 701 742 750 728 699 -4% -19% 706 745 739

Plate Germany €/t 560 535 510 505 525 545 545 530 -3% -12% 538 543 548US$/t 725 695 655 662 696 730 709 693 -2% -12% 703 710 717

France €/t 560 535 505 500 520 540 540 525 -3% -13% 533 538 543US$/t 725 695 649 655 690 723 702 686 -2% -13% 697 703 710

Italy €/t 525 505 470 460 500 495 495 490 -1% -16% 495 500 505US$/t 680 656 604 603 663 663 644 640 -1% -16% 648 654 661

UK £/t 450 440 425 415 435 445 455 455 0% -8% 455 455 455US$/t 728 708 679 669 694 694 686 697 2% -12% 694 694 694

Spain €/t 520 500 465 455 495 495 500 490 -2% -15% 490 495 495US$/t 673 650 597 596 657 663 650 640 -2% -15% 641 648 648

EU steel long product price comparisonSep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 m-o-m % y-o-y % May-13 f Jun-13 f Jul-13 f

Sections Germany €/t 620 600 585 605 650 640 610 600 -2% -9% 600 605 605US$/t 803 780 751 793 862 857 793 784 -1% -10% 785 792 792

France €/t 620 595 585 605 650 635 610 600 -2% -8% 590 595 598US$/t 803 773 751 793 862 851 793 784 -1% -9% 772 779 783

Italy €/t 600 585 575 610 625 600 585 575 -2% -11% 575 580 580US$/t 777 760 739 800 829 804 761 752 -1% -11% 752 759 759

UK £/t 520 490 480 490 540 545 530 505 -5% -8% 515 515 515US$/t 842 789 766 790 861 850 799 774 -3% -12% 786 785 785

Spain €/t 600 580 570 595 625 600 585 575 -2% -10% 575 580 580US$/t 777 754 732 780 829 804 761 752 -1% -11% 752 759 759

Rebars Germany euro/t 540 540 535 540 545 525 500 495 -1% -13% 505 505 515US$/t 699 702 687 708 723 703 650 647 -1% -14% 661 661 674

France €/t 535 535 530 535 540 520 495 490 -1% -14% 500 500 510US$/t 693 695 681 701 716 697 644 640 -1% -15% 654 654 668

Italy €/t 530 530 485 520 505 493 480 470 -2% -17% 475 475 485US$/t 686 689 623 682 670 660 624 614 -2% -17% 621 622 635

UK £/t 430 430 435 475 450 455 435 420 -3% -12% 420 430 430US$/t 696 692 695 766 718 709 656 644 -2% -15% 641 656 656

Spain €/t 525 525 480 520 505 490 478 475 -1% -15% 482 482 492US$/t 680 682 617 682 670 656 621 620 0% -16% 630 630 643

Merchant Germany €/t 560 565 535 555 600 590 560 555 -1% -10% 565 565 570bars US$/t 725 734 687 728 796 790 728 725 0% -10% 739 739 746

France €/t 555 560 530 550 600 585 555 550 -1% -11% 560 560 570US$/t 719 728 681 721 796 784 722 719 0% -11% 733 733 746

Italy €/t 550 555 485 565 575 555 547 537 -2% -12% 540 545 555US$/t 712 721 623 741 763 744 711 702 -1% -13% 707 713 726

UK £/t 460 455 435 500 495 505 480 465 -3% -10% 475 485 485US$/t 744 733 695 806 790 787 724 713 -2% -14% 725 740 740

Spain €/t 545 550 485 565 575 550 548 545 -1% -10% 545 550 560US$/t 706 715 623 741 763 737 712 712 0% -11% 712 719 732




Long Product Analysis

l US mills are beginning to achieve higher prices given improving overseas interest l EU mills have had to be content with more or less stable, though low, pricesl Chinese mills still overproduce despite slow government spending

Modest price rises in the USA…Rebar prices in the USA are slowly climbing out of the trough they fell into in October and look to be sustaining a promising rise. The market remains fragile, and more sober minded producers have been careful not to test the market beyond its limits, notably Nucor Corporation, usually accepted as the market leader. After first proposing a small price rise, Nucor passed on much of the recent fall in scrap prices to bar customers.

In early April, Gerdau Long Steel North America attempted to increase rebar prices, regardless of the fall in scrap costs. It aimed at a modest enough rise in transaction prices, 50c/UScwt ($11/tonne), to take effect 15 April. Within a week Nucor adjusted its earlier thoughts on prices to comply, more or less, with the fall in the scrap index. Normally following large price falls, Nucor announced a cut in the surcharge, to preserve the myth that it applies movements in the index to prices, and partly compensated for the fall with a small rise in the list price, leaving Nucor with a higher margin, but a transaction price lower than Gerdau had proposed. Therefore, Gerdau quickly matched the Nucor price. It did the same again when Nucor’s associate in the structural sections market, Nucor-Yamato Steel, introduced a similar price change, $1.10/UScwt off the scrap surcharge, 10c/UScwt on the list price, leaving prices $1/UScwt lower.

Market Outlook Supply US mills are not likely to increase output significantly, but there is a prospect of higher imports over the next few months, which may be combated with a range of legal and price-fighting measures. In the EU the main aim will continue to be to trim production back to match demand; imports will remain at low levels. It is unlikely that Chinese government’s ambitions to close obsolete long products mills will show in reduced supply even by the end of the year, and supply conditions among its neighbours in the region are likely to include more anti-dumping moves against Chinese-origin imports.

Demand US steelmakers seem to be confident that commercial building demand will soon recover in the wake of rising residential development, but the uncertain macro-economic picture may rule this out. EU steelmakers face another tough year at home and are likely to find exporting material increasingly difficult as capacity rises in prime export markets. Persian Gulf and Asian demand is likely to rise steadily, but perhaps not fast enough to absorb all of the new production on offer.

Outlook Long product prices in all areas are unlikely to rise significantly before the end of the year.

400

500

600

700

800

900

Dec11

Jan12

Feb12

Mar12

Apr12

May12

Jun12

Jul12

Aug12

Sep12

Oct12

Nov12

Dec12

Jan13

Feb13

Mar13

Apr13

Source: MBR

Longs prices($/tonne)

Turkish Rebar (FOB)Ukraine Billet (FOB)Northern EU Rebar (EXW)US Rebar (EXW)

Key pricesThis

week Next monthTurkish Rebar FOB ($/t) 595 1%

Ukraine Billet FOB ($/t) 503 -2%

EU Rebar EXW ($/t) 660 -2%

US Rebar EXW ($/t) 761 -1%

US housing - Private housing starts ‘000 units

Source: US Census Bureau

0

20

40

60

80

100

Mar

10

Sep

10

Mar

11

Sep

11

Mar

12

Sep

12

Mar

13

Starts Trend

France: Industrial Production Index Data and 12-month average

Source: NISES France

60

80

100

120

Feb

09

Aug

09

Feb

10

Aug

10

Feb

11

Aug

11

Feb

12

Aug

12

Feb

13

Unadjusted Smoothed



…revive Interest in importsNucor has good grounds to be cautious with prices in case imports are attracted. The price difference between domestic and imported rebar was tight for most of last year but widened from the final quarter. It looked likely to stay wide enough to justify the wait for foreign deliveries, rather than pay more for the short lead times from a domestic mill – advantageous when, as now, service centres are managing stocks frugally, holding less than 3 months cover. As a result, over 112,000 tonnes of imported rebar were expected to be landed in March, - climbing over 50% from February’s level and 14% higher than in March last year.

Current price relationships already make it likely that this trade flow will continue. Imports are on offer for midyear delivery at $30/UScwt ($661/tonne) compared with current domestic prices of $34-34.50/UScwt ($750-761/tonne). Few consider that there is a risk prices from domestic mills could fall sufficiently by the third quarter to make ordering imports at this price uncompetitive/unattractive. Nucor does not want to signal that even higher domestic prices are in prospect for later in the year.

Housing activity up but still waiting for commercial take-offNucor is cautious because imports are not entering a booming market. Construction activity has picked up, but the main growth is still in the residential sector. This includes multi-household buildings, which make use of steel frames and reinforced concrete. However, leading indicators in the housing market are mixed.

Housing starts in March were 47% higher than a year before, and 7% higher than in February, but new permits for buildings – which determine the next round of starts – were slower than in February. Permits for housing units were 3.9% lower in March than in February. There was worse news for long product mills in data on multi-household permits. Though 9% higher in March this year than March 2012 they were 27% lower than in February.

EU demand still slowEU long product mills continue to suffer with declining activity levels in the construction sector. The UK market has deteriorated sharply, with the effects of spending cuts exacerbated by extended wintry weather making it the worst first quarter since 1987. EU producers have reduced operating rates in an effort to re-balance the market but as US steelmakers have discovered, the existence of unused capacity can in itself undermine prices. Although there have been brief rallies, rebar prices have effectively been in retreat since the end of 2011.

Rebar prices have deteriorated since increasing at the beginning of this year; rebar prices are down from €540-545/tonne ($716/tonne) in January to around €505-510/tonne ($665/tonne) in northern markets, but there is a wide spread of prices, with some EU-origin material on offer for less than €500/tonne ($664/tonne). Prices are under pressure from both southern EU and Polish rebar mills.

There is a similarly wide range of prices, at a lower level, in southern markets. Falling from around €505/tonne ($660/tonne) in January, prices now range from €455/tonne ($595/tonne), the lowest bids in the Italian market, to €470-475/tonne ($618/tonne) and above in Spain. Several attempts to advance sections prices in the EU have failed; prices now seem to have settled around €600/tonne ($784/tonne) or a little higher in northern markets, and around €20/tonne ($26/tonne) lower in southern markets. The extended winter slowed the off take by building projects from the distribution system, which further damped demand at service centres and fabricators.

South Korea - Building starts ‘’000 of units

Source: Min of LTMA

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In Spain during 2012, the worst impact from the collapse of domestic demand was mitigated by success in export markets, especially in North Africa. Output of long products fell during the year, but only 8% compared to a fall of 21% in flat products output; crude steel output declined 12% from the 2011 total. Crude steel production has continued to fall this year, but the rate of decline has slowed. Output in January was 6% lower year-on-year and in February 2% lower, raising the prospect that long product output may now be stabilising.

The biggest producers have the weakest marketsThe fundamental problem for long products in the EU is that capacity is concentrated in the countries that currently have the weakest economies, Italy and Spain, and these have seen the biggest falls in steel consumption. They have a record of high rates of exports both within and outside the EU, but still have a requirement for a secure domestic base; this has been shrinking, and as long as their governments have to impose tough spending cuts, it will continue to shrink. Net trade in long products by the EU with non-EU countries in 2012 amounted to 8.5m tonnes, which as much reflected the decline in demand within the EU – which drove imports of all products down by 27% compared with 2011 – as success in export markets.

For the immediate future there remain export opportunities for both Italian and Spanish producers in North Africa, but local long product capacity is growing. Growth in long product demand in the Middle East region is likely to accelerate in the months ahead, but here too capacity is growing and the slowdown in demand in the CIS is likely to lead to increased competition. Black Sea exporters are reported to be struggling to prevent further price falls. For now, Russian billet remains at $510-515/tonne, but rebar prices have slipped by around $5/tonne. The market has slowed ahead of a number of holidays clustered in the first half of May, beginning with Mayday and taking in post-Second World War commemorations.

New campaign to cut low grade products in China Chinese prices continue to fluctuate in a narrow range without showing any sign of breaking out into a sustained rise. The government has repeatedly complained not only of excess capacity, but also of the excess and pollution caused by inefficient steelworks as they turn out low grade products. The government plans to close capacity this year, much of it dedicated to long products. Nevertheless, a similar campaign in 2012 did not prevent output from growing to more than 716.5m tonnes, far more than domestic consumption.

There is a chance that a more specific campaign may now achieve more. The National Development and Reform Commission (NDRC), which is responsible for capacity reform, issued an order in February to abandon production of grade II rebar (HRB335) by May 1. In fact, there are already market pressures driving towards abandoning this grade of rebar, as most new construction projects specify high tensile strength grades.

For Shagang Group, grade II rebar is said to amount to nearly 40% of output. Nevertheless the company has said it has stopped delivering the low specification rebar and will cease production on or before 1 May. Some other mills promise to comply. Many, however, complain that it is impossible to stop at such short notice; production plans and sales plans have longer than 60 days horizons; some projects may have been designed around this grade.

Perverse market resultThere has been one unintended consequence of the order; the withdrawal of the product by Shagang and other mills has tightened supply so much, that buyers who need it have bid the price up to the level of grade IV (HRB400), a more expensive bar to produce. In Shanghai, grade III rebar in common diameters has been selling for CNY3,540-3,750 ($571-604/tonne), and grade II bar is fetching around CNY3,630/tonne ($585/tonne).

China’s excess H-beam production meanwhile is being disposed of at low prices in nearby export markets. They have begun to dominate the import market in South Korea. Of 119,000 tonnes of H-beams imported in February 113,000 tonnes came from China; this is large in relation to local capacity. Two H-beam producers, Hyundai Steel and Dongkuk Steel between them produced around 160,000 tonnes in March. Dongkuk is reported to be considering a request for an anti-dumping investigation.



Long product shipment, production, net exports and apparent consumption statistics ('000 tonnes)Q3 12 Q4 12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13

USA Rebar Shipment 1,488 1,458 490 535 495 458 496 483 479 -Net exports 26 25 11- 10 7 9 9 8 8 - App. consumption 1,462 1,432 501 524 488 449 487 475 470 -

Heavy sections Shipment 1,243 1,243 373 377 503 364 414 427 402 - Net exports 146 132 75 67 49 30 49 43 40 - App. consumption 1,098 1,112 298 310 454 334 366 385 361 -

Wire rod Shipment 612 612 198 193 229 190 204 208 200 - Net exports 180- 183- 74- 61- 49- 70- 60- 60- 63- - App. consumption 792 795 272 254 278 259 264 267 264 -

EU Long products Production 12,294 11,756 4,764 4,285 3,087 4,922 4,903 4,811 2,042 - Net exports 3,029 2,299 1,114 949 1,043 1,037 1,205 1,094 - - App. consumption 9,265 7,415 3,650 3,336 2,044 3,885 3,698 3,717 - -

Rebar Production 2,545 2,531 1,004 879 644 1,022 1,033 957 541 - Wire rod Production 4,360 4,739 1,670 1,453 1,067 1,841 1,815 1,885 1,040 -

China Rebar Production 45,888 46,796 15,173 15,024 15,041 15,823 16,092 15,782 14,922 - Net exports 38 62 15 11 11 15 25 16 21 - App. consumption 45,850 46,734 15,158 15,013 15,030 15,808 16,067 15,766 14,901 -

Heavy sections Production 2,759 2,863 995 922 925 912 969 934 960 - Net exports 166 159 62 61 35 70 37 45 76 - App. consumption 2,593 2,704 933 861 890 842 932 889 884 -

Wire rod Production 34,656 35,912 12,088 11,340 11,534 11,782 12,353 11,993 11,566 - Net exports 79- 40- 21- 30- 28- 20- 18- 12- 10- - App. consumption 34,735 35,952 12,109 11,370 11,562 11,802 12,371 12,005 11,576 -

Japan Rebar Production 2,039 2,156 729 702 632 705 742 730 684 - Net exports 80 61 20 34 19 28 14 27 21 - App. consumption 1,959 2,095 709 668 613 677 728 703 663 -

Heavy sections Production 235 243 91 81 82 72 77 80 86 - Net exports 374 331 160 118 126 130 106 100 126 - App. consumption 139- 88- 69- 37- 44- 58- 29- 20- 40- -

Wire rod Production 1,471 483 494 489 490 492 483 - - - Net exports 174 156 64 58 72 45 51 41 64 - App. consumption 1,297 327 430 431 418 447 432 41- 64- -

South Korea Rebar Production 2,253 2,310 762 752 733 768 728 807 775 - Net exports 50- 63- 4 27- 16- 7- 33- 17- 14- - App. consumption 2,303 2,373 758 779 749 775 761 824 789 -

Heavy sections Production 1,013 949 370 357 349 307 285 318 346 - Net exports 128 182 95 31 42 55 58 57 66 - App. consumption 885 767 275 326 307 252 227 261 280 -

Wire rod Production 666 693 228 238 224 204 233 232 228 - Net exports 153- 42- 44- 54- 54- 45- 15- 20- 7- - App. consumption 819 735 272 292 278 249 248 252 235 -

Taiwan Rebar Production 1,367 1,545 496 474 456 437 523 512 509 - Net exports 10 14 1 3 2 6 4 1 8 - App. consumption 1,357 1,531 495 472 454 431 519 511 501 -

Russia Rebar Production 1,981 1,808 647 668 678 635 627 586 595 563 Net exports 214- 156- 31- 69- 89- 57- 70- 68- 18- 35- App. consumption 2,195 1,963 678 737 767 691 697 654 613 598

Heavy sections Production 925 871 297 304 307 313 322 293 256 279 Net exports 149- 182- 41- 51- 24- 74- 56- 50- 76- 55- App. consumption 1,074 1,053 338 355 331 388 378 343 332 334

Wire rod Production 689 626 221 232 237 220 199 221 207 201 Net exports 119 113 30 43 24 52 32 50 32 17 App. consumption 569 513 191 188 214 167 167 171 175 184

Ukraine Rebar Production 872 865 289 282 300 290 308 292 265 291 Net exports 617 646 216 162 232 223 212 202 232 214 App. consumption 255 219 73 120 68 67 96 89 33 77

Heavy sections Production 479 531 140 166 147 167 171 175 184 175 Net exports 276 292 70 92 90 94 99 92 101 90 App. consumption 203 238 71 74 56 74 72 83 83 85

Wire rod Production 460 373 166 144 173 143 120 117 136 125 Net exports 329 250 131 97 111 120 77 90 83 100 App. consumption 132 123 36 47 62 23 43 27 53 25

India Wire rod, rebar Production 7,075 6,948 2,501 2,212 2,626 2,237 2,357 2,327 2,264 - Net exports (wire rod) 32- 0 16- 21- 11- 0- 8 5- 2- - Net exports (rebar) 6- 7- 9- 1- 0- 5- 3- 3- 1- - App. consumption 7,113 6,955 2,526 2,234 2,638 2,242 2,353 2,335 2,267 -

Medium & heavy sections Production 1,565 1,580 483 494 591 480 560 496 524 - Net exports 13- 21- 4- 8- 3- 2- 6- 2- 13- - App. consumption 1,578 1,601 487 503 594 482 566 498 537 -

Turkey Rebar Net exports 1,989 2,149 765 686 632 671 725 633 791 - Brazil Rebar Production 1,123 918 341 367 381 375 375 328 214 -

Net exports 5 19- 1 8 4 7- 8 16 44- - App. consumption 1,118 937 340 359 377 382 367 312 258 -

Wire rod Production 1,004 808 273 347 337 320 289 281 238 - Net exports 30- 19- 25- 20- 27- 17 12- 13- 6 - App. consumption 1,035 827 299 367 364 304 301 294 232 -




Raw materials focus

l Raw Materials Index slides againl Lower energy and scrap costs driving downward move...l ...although stabilization now expected

Market Outlook MBR’s Steel Raw Materials index has continued its month-on-month slide as absent demand forces prices lower. From a reading of 173.42 last month the index declined towards 170.56 in mid April before settling lower at 169.71 towards the end of the month. The 2.1% month-on-month decline illustrates the weaker market conditions with Chinese export and domestic coke prices leading the decline, dropping 2.6% and 7.1% month-on-month respectively.

MBR’s Global Steel Price index has continued to trend lower as declines in global long product prices over the past month contribute to the weaker index as a lack of demand prevented producers from securing higher prices. For the coming month we expect the index to stabilise as buyers slowly return to the market to take advantage of lower prices and replenish stocks.

Steelmaking cost indices

Steelmaking costs in both the US and China have dropped slightly over the past month as a combination of reduced energy costs and lower scrap prices in the US and falling raw materials prices in China has lowered the cost base for producers. Both markets are struggling with significant inventory overhang, with US producers particularly hard hit from cheaper imports. For the coming month we expect costs to stabilise as stimulus from construction projects and manufacturing activity boosts demand.

MBR steel raw materials index vs MBR global steel price index

With weak demand persisting over the past few months, in many regions falling faster than production cutbacks, we have seen a gradual decline in both the steel raw materials and global steel price indices. With demand still struggling to improve we expect global steel prices to remain depressed over the coming month. Raw materials prices will be quicker to react to any signs of improvement and we subsequently expect raw materials prices to stabilise in the coming month.

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Forecast



MB Ferrous Scrap Index MB Iron ore Index MBR World Pig iron Index MBR World Coking Coal Index MBR Chinese Coke Index MBR Latin America HBI Index Baltic Dry IndexTurkey CFR basis ($/tonne) China CFR basis ($/tonne) (2008 average=100) (2008 average=100) (2008 average=100) (2008 average=100) Monthly average

Oct-11 440 155 84 89 87 77 2,086Nov-11 421 133 77 81 87 70 1,384Dec-11 445 137 77 80 87 69 1,808Jan-12 457 142 81 73 87 70 997Feb-12 432 143 79 73 88 69 699Mar-12 439 145 80 70 89 72 862Apr-12 445 147 80 70 90 71 1,031May-12 437 140 80 70 90 69 1,118Jun-12 383 136 76 69 88 66 937Jul-12 380 129 70 68 88 64 1,059Aug-12 405 108 68 63 84 63 752Sep-12 378 99 68 51 82 62 718Oct-12 364 116 63 47 82 57 965Nov-12 396 121 64 51 82 58 1,028Dec-12 383 126 65 50 82 60 787Jan-13 399 152 67 50 62 61 775Feb-13 387 156 68 55 56 62 748Mar-13 394 141 69 54 52 63 868Apr-13 394 138 70 54 49 62 875

Raw material and freight price trends*

Quarterly raw material contract price estimates

Hard-coking coal LV PCI Brazilian BF Fines Brazil BF Pellet Australian BF fines Australian IO LumpFOB E. Australia to Asia FOB Australia to Asia FOB Tubarao FOB Tubarao FOB W. Australia FOB W.Australia

$/dry tonne $/dry tonne $/dry tonne $/dry tonne $/dry tonne $/dry tonneQ1 11 317 275 144 195 132 154Q2 11 301 230 178 241 163 190Q3 11 297 227 176 238 162 188Q4 11 264 202 157 238 144 168Q1 12 228 174 141 195 130 151Q2 12 221 169 146 162 134 156Q3 12 193 147 127 120 116 136Q4 12 156 119 114 107 105 123Q1 13 169 129 148 99 136 158

Coking coal Iron ore

Iron ore and scrap Scrap price stability remains at odds with iron ore: a short-

term decline remains our forecast for both

Sources: Metal Bulletin Research

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Coking coal forecast While iron ore might now be influencing coking coal,

pig iron remains supported by scrap

Sources: Metal Bulletin Research

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Regional data focus: Middle East and North Africa

Supply/Demand fundamentals: Iran’s Sadr Steel Lorestan has set out its plans to backward-integrate this month, announcing their plans to construct a 320ktpy EAF to produce billet. The company already operates a 240ktpy rolling mill and their latest plans arrive as the Iranian steel industry continues to grow. One of Iran’s largest steelmakers, Khouzestan Steel, this month announced an increase in annual output by 4% to 3.5Mt of semis in the 12 months to March 2013.

Pricing implications: With less exposure to external competition and the effects of global overcapacity, due largely to trade embargos and a plunging value in the domestic currency, Iranian producers have had more success in increasing prices recently relative to their neighbouring countries. Recent transaction prices for Iranian rebar are at IRR19.40m/tonne exw ($1,552/tonne at official exchange rates, closer to $600/tonne at unofficial rates), up by 5% on last month.

Indexed IRR/$ ex-change rate (May 1 2011 = 100)

Iran’s official exchange rate has fallen 15% against the dollar in the last 2 years. The fall in the unofficial ex-change rate, however, is thought to be much larger at more than 70%

Middle East: STEEL PRODUCTIVITY INDICATORS 2011 2012 Q2 12 Q3 12 Q4 12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 y-o-y %

Israel: Industrial Production: Basic Metal (2004=100) 126 125 125 126 125 127 125 123 123 128 - - -0.2%

Jordan: Industrial Production: Basic Metal (1999=100) 121 116 121 116 111 115 138 99 118 115 90 89 -10.4%

Turkey ('000 tonnes)

IPI: Steel, excl stainless and high speed 177 1,068 409 - - - - - - - - -

IPI: Alloy steel, flat semi finished 11,400 12,217 3,105 3,134 3,087 977.2 1,022.7 966.6 1,113.6 1,007.3 - - 7.2%

IPI: Rebar 15,639 17,015 4,216 4,195 4,354 1,329.5 1,450.3 1,431.4 1,448.4 1,474.5 - - 8.8%

IPI: Tube and pipe - Welded 481 689 150 182 214 55.1 67.6 62.3 83.8 67.5 - - 43.3%

Middle East: STEEL PRODUCTION ('000 tonnes) 2011 2012 Q2 12 Q3 12 Q4 12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 y-o-y %

Turkey: Blast Furnace Iron 8,172 8,611 1,849 2,220 2,355 774 721 785 776 794 820 741 6.9%

Direct Reduced Iron

Iran 9,829 11,582 2,943 2,887 3,122 982 993 945 995 1,182 868 992 19.1%

Qatar 2,252 2,420 574 642 563 222 215 220 126 217 211 195 3.2%

Saudi Arabia 4,938 4,977 1,230 1,249 1,161 424 368 458 443 260 424 436 1.6%

Crude Steel Production

Iran 13,156 14,463 3,764 3,496 3,577 1,142 1,232 1,166 1,222 1,189 1,111 1,199 -2.5%

Qatar 2,014 2,145 556 539 495 181 173 143 176 176 197 179 0.6%

Turkey 34,105 35,875 8,902 9,229 8,719 3,042 3,052 2,881 2,993 2,845 2,859 2,655 -3.9%

Saudi Arabia 5,275 5,202 1,350 1,139 1,355 447 410 467 437 451 463 437 1.1%

Hot Rolled Steel

Iran 16,842 19,827 4,373 7,011 4,139 1,496 1,491 1,383 1,338 1,418 - - 17.7%

Qatar 138 1,650 422 419 384 139 141 123 117 144 - - -0.4%

Hot rolled long products

Iran 8,988 8,784 2,220 2,232 2,095 741 730 661 726 708 - - -2.3%

Qatar 138 1,650 422 419 384 139 141 123 117 144 - - -0.4%

Iran: Heavy Sections >80mm 2,223 2,086 546 501 464 144 151 149 173 142 - - -6.2%Iran: Light Sections <80mm 720 865 224 252 243 84 80 80 78 85 - - 20.1%

Rebar

Iran 6,043 5,833 1,449 1,479 1,388 513 499 432 475 481 - - -3.5%

Qatar 138 1,650 422 419 384 139 141 123 117 144 - - -0.4%

Iran: Hot Rolled Strip, Sheet and coil <3mm 7,504 7,890 1,976 2,051 1,884 690 695 680 562 642 - - 5.1%Iran: Cold Strip, Coil and Sheet 1,381 1,561 382 399 417 133 133 132 112 173 - - 13.0%Iran: Tubes 32 32 8 9 8 3 3 2 3 3 - - -2.7%

Middle East: DEMAND-SIDE INDICATORS 2011 2012 Q2 12 Q3 12 Q4 12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 y-o-y % Bahrain: GDP: Manufacturing (BHD m) 1,675 1,736 447 432 429 - 432.0 - - 428.9 - - 3.6%

Israel: Private sector construction approved ('000 sq m) 10,596 9,002 1,901 2,479 2,188 797 840 598 613 977 663 - -16.5%Jordan: GDP: Manufacturing (JOD m) 3,485 3,633 826 1,084 1,003 - 1,084 - - 1,003 - - 4.2%

Lebanon: Construction Permits: Area ('000 sq m) 31,809 146,809 39,851 32,282 38,596 9,276 11,042 11,530 10,949 16,117 7,479 - 259.2%Qatar: GDP: Non Oil Manufacturing (QAR m) 252,004 279,539 68,537 68,606 69,077 - 68,606 - - 69,077 - - 10.9%Saudi Arabia: GDP: Manufacturing (SAR m, sa) 20,477 21,966 5,239 5,959 5,884 - 5,959 - - 5,884 - - 7.3%

Turkey

Mfg Capacity Utilization: Basic Metal Industry (%) 78 78 79 77 77 76 77 77 76 79 77 74 -3.8%

Mfg Capacity Utilization: Consumer Durables (%) 71 71 71 71 71 70 71 72 71 71 71 70 -2.4%

Motor Vehicle Production ('000 units) 1,228 1,115 297 237 286 38 103 93 104 89 86 97 -2.5%

New Orders Index: Basic Metals (2005=100) 278 288 297 281 287 265 287 282 294 283 - - 3.3%

Construction Permits Issued: Floor Area ('000 sq m, ytd) 281,074 356,237 72,176 106,557 151,968 - 106,557 - - 151,968 - - 26.7%

Source: MBR, CEIC, WSA , CBRT Note: sa - seasonally adjusted

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Iranian steel production (‘000 tonnes)

Despite much of the economy suffering as a result of economic sanc-tions, Iran’s steel output continues to grow, rising by 11% last year

Middle East: NET IMPORTS ('000 tonnes) 2011 2012 Q2 12 Q3 12 Q4 12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 y-o-y %

BILLETS <0.25%CIran 535 676 133 322 179 66.61 87.90 167.45 90.42 80.07 8.02 - 26.3%Jordan 242 209 30 69 50 42.09 18.83 8.11 25.27 18.32 6.73 17.79 -13.8%Saudi Arabia 809 766 407 171 59 77.48 74.57 19.11 8.14 51.15 0.18 - -5.3%Syria 765 257 87 53 22 18.86 11.55 22.58 4.53 6.94 10.99 19.49 -70.2%Turkey -133 51 173- 179- 130 23.76- 200.16- 44.88 48.58 75.97- 156.89 - -138.3%

HOT ROLLED < 3MMIran 1,819 779 173 223 120 64.81 24.42 133.50 58.33 51.89 9.83 24.07 -65.5%Jordan 88 136 22 36 51 6.01 13.42 16.73 15.33 26.30 9.55 11.76 40.6%Libya 31 31 9 8 15 0.99 2.17 4.70 4.95 3.30 6.77 3.23 9.4%Saudi Arabia 436 814 198 233 245 83.68 124.90 24.01 94.02 60.43 90.58 45.49 84.2%Syria 115 33 17 7 - 5.44 1.46 - - - - - -45.3%Turkey 827 1,027 247 321 233 107.82 107.47 105.55 138.87 37.68 56.56 - 24.1%Algeria 299 144 37 35 44 13.80 8.00 13.46 9.82 17.74 16.33 - -51.7%

COLD ROLLEDIran 296 296 88 76 55 32.21 25.34 22.69 18.05 14.31 22.56 0.57 -11.5%Jordan 67 67 18 13 24 9.20 1.15 4.61 0.10 15.48 8.17 0.27 -10.0%Libya 5 5 0 0 2 0.81 0.08 0.01 1.41 0.21 0.26 1.23 2970.0%Saudi Arabia 77 77 20 10 31 4.96 9.11 4.43 7.21 8.36 15.21 3.74 0.5%Syria 30 30 8 9 0.6 1.90 0.41 0.22 - 0.34 0.22 0.11 -16.2%Turkey 503 524 141 141 89 61.07 46.87 50.04 42.00 21.53 24.99 - 4.1%

REBAR AND RODIran 161 54 19 28 5 9.15 10.35 8.60 5.03 0.14 0.00 - -66.2%Jordan 26 20 1 1 5 - 0.10 1.00 1.81 - 3.10 0.01 -35.1%Libya 397 397 24 65 140 22.99 7.57 34.87 47.34 25.42 67.49 - 0.0%Saudi Arabia 240 691 265 179 154 69.16 68.37 41.15 39.34 39.83 74.56 0.00 187.7%Syria 143 4 4 0.1 - - - 0.07 - - - - -96.9%Turkey -6,482 -8,615 2,147- 1,989- 2,149- 686.34- 631.98- 671.06- 725.47- 633.05- 790.81- - 32.9%Algeria 1,389 2,796 713 483 870 110.04 174.51 198.67 316.76 287.06 266.40 - 101.3%

WIRE RODIran 425 236 31 55 77 8.31 4.64 41.85 34.59 25.54 16.55 7.88 -50.5%Jordan 254 280 79 78 57 17.49 35.88 24.25 9.68 22.17 24.85 13.02 -5.5%Libya 89 89 19 12 42 3.60 - 8.27 6.47 18.44 17.48 - 0.0%Saudi Arabia 54 87 41 28 0 13.08 14.71 0.00 0.16 0.01 - - 135.5%Syria 79 70 32 13 6 10.73 2.00 - 0.98 5.10 0.30 3.17 -30.6%Turkey -779 -542 149- 119- 114- 32.93- 36.75- 49.43- 58.57- 21.71- 34.14- - -30.4%Algeria 60 544 153 85 193 45.92 19.11 19.65 52.01 70.73 70.21 6.83 435.8%

OTHER LONG PRODUCTSIran 50 24 12 4 4 1.69 0.90 1.65 0.57 0.98 2.14 0.05 -57.4%Jordan 9 12 1 2 5 0.08 1.61 0.11 0.04 4.71 0.24 0.36 12.6%Libya 4 18 2 4 5 2.17 0.90 1.03 2.34 0.93 1.84 0.01 2609.9%Saudi Arabia 147 154 53 29 18 12.05 7.57 9.28 4.86 7.58 5.33 0.22 -4.9%Syria 38 16 5 1 2 1.00 - 0.08 2.00 - - - -49.5%Turkey -1,050 -1,226 317- 268- 270- 106.64- 72.80- 88.51- 76.46- 93.59- 100.07- - 16.8%Algeria 144 422 126 69 124 42.64 18.67 8.18 49.73 37.43 37.09 - 193.3%

HEAVY SECTIONSIran 610 147 38 54 21 15.83 14.26 23.62 9.82 5.79 5.20 1.09 -78.5%Jordan 23 59 17 10 21 2.33 5.93 2.17 5.65 6.72 8.13 4.22 103.2%Libya 19 12 2 3 4 0.92 1.89 0.47 2.39 0.14 1.63 0.02 -11.0%Saudi Arabia 582 514 150 96 125 24.57 30.84 40.14 62.28 25.01 37.99 16.71 -15.7%Syria 60 12 3 1.0 - 0.37 - 0.63 - - - - -79.0%Turkey -276 -195 33- 44- 45- 18.75- 22.96- 1.93- 8.49- 20.23- 16.49- - -29.3%Algeria 584 159 51 25 48 5.91 10.95 8.26 9.37 16.27 22.54 6.09 -70.2%

Iraq: Net imports of steel from China 259 232 29 57 62 16.95 14.48 25.20 11.69 25.89 24.90 33.07 -1.9%Source: MBR, CEIC, customs statistics

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Apr 0

9M

ay 0

9Ju

n 09

Jul 0

9Au

g 09

Sep

09Oc

t 09

Nov

09De

c 09

Jan

10Fe

b 10

Mar

10Ap

r 10

May

10Ju

n 10

Jul 1

0Au

g 10

Sep

10Oc

t 10

Nov

10De

c 10

Jan

11Fe

b 11

Mar

11Ap

r 11

May

11Ju

n 11

Jul 1

1Au

g 11

Sep

11Oc

t 11

Nov

11De

c 11

Jan

12Fe

b 12

Mar

12Ap

r 12

May

12Ju

n 12

Jul 1

2Au

g 12

Sep

12Oc

t 12

Nov

12De

c 12

20 Steel: Weekly Market Tracker April 2013+++

Steel: Weekly M

arket Tracker / Issue 210 / 24 April 2013

Steel futures focus

SHFE: Rebar contractIncreasing rebar volumes as further material was added to futures contracts depressed prices over the past week. Spot prices led the declines as slower Chinese GDP growth in the first quarter prompted a renewed wave of bearish undertones.

SSEC: HRC contractWeaker Chinese GDP growth figures for Q1 2013 have prompted a mini sell-off in HRC futures, with open positions declining 2.85% week-on-week. For the coming month we expect prices to display rangebound volatility as par-ticipants reactions to economic data are magnified.

130

230

330

430

530

630

Mar12

Apr12

May12

Jun12

Jul12

Aug12

Sep12

Oct12

Nov12

Dec12

Jan13

Feb13

Mar13

Apr13

LME Billet ($/tonne)Cash ask

3 month ask

15 month ask

Weekly LME steel billet changes

Cash 146.60 150.10 -9.25%

3 month 170.00 180.00 -7.22%

15 month 230.00 240.00 -5.51%

Official opening stock change week-on-week -0.42%

Cancelled warrants change week-on-week 6.58%Source: Metal Bulletin Research

Prices are in $/tonne, changes are week-on-week

ChangeLME weekly average prices: Bid Ask

3,250

3,450

3,650

3,850

4,050

4,250

4,450

4,650

4,850

Mar12

Apr12

May12

Jun12

Jul12

Aug12

Sep12

Oct12

Nov12

Dec12

Jan13

Feb13

Mar13

Apr13

SHFE Rebar (Rmb/tonne)1 month

3 month

6 month

1 month -4.54%

3 month -3.78%

6 month -3.44%

Open position change week-on-week -5.49%

Volume change week-on-week 12.81%Source: Metal Bulletin Research

Weekly SHFE steel rebar changes

SHFE weekly average prices: ChangeSettlement Price

3557.00

3640.40

3699.20

Prices are in Rmb/tonne, changes are week-on-week

3,100

3,300

3,500

3,700

3,900

4,100

4,300

4,500

4,700

Mar12

Apr12

May12

Jun12

Jul12

Aug12

Sep12

Oct12

Nov12

Dec12

Jan13

Feb13

Mar13

Apr13

SSEC HRC (Rmb/tonne)1 month

3 month

6 month

1 month -3.75%

3 month -3.14%

6 month -2.89%

Open position change week-on-week -2.85%

Volume change week-on-week 9.60%Source: Metal Bulletin Research

Prices are in Rmb/tonne, changes are week-on-week

SSEC weekly average prices:

Weekly SSEC steel HRC changes

Settlement Price Change

3711.60

3714.80

3728.60

LME: Billet ContractLME futures continue to slide, with many participants believing the new lows signal the end of the contract as a benchmark for hedging and risk management. The near 10% week-on-week decline in price and the 6.6% increase in cancelled warrants suggest many participants are looking to move their material out of costly warehouses.

Published weekly by Metal Bulletin LtdISSN 2040-2015Analysts: Kashaan Kamal, Laima Alavociute and Robert Cartman

Editor: Alistair Ramsay Metal Bulletin Research Nestor House, Playhouse Yard London EC4V 5EXTel: +44 20 7827 6488

Other MBR reports include:l Coated Steel Market Trackerl North American Steel Market Trackerl Stainless Steel Market Trackerl Welded Steel Tube & Pipe Market Trackerl Seamless Steel Tube & Pipe Market Trackerl Ferro-alloys Market Tracker

To receive a sample of any one of these reports, please email your details to: [email protected]

DISCLAIMER - IMPORTANT PLEASE READ CAREFULLYThis Disclaimer is in addition to our Terms and Conditions as available on our website and shall

not supersede or otherwise affect these Terms and Conditions.

Prices and other information contained in this publication have been obtained by us from various sources believed to be reliable. This information has not been independently verified by us. Those prices and price indices that are evaluated or calculated by us represent an approximate evaluation of current levels based upon dealings (if any) that may have been disclosed prior to publication to us. Such prices are collated through regular contact with producers, traders, dealers, brokers and purchasers although not all market segments may be contacted prior to the evaluation, calculation, or publication of any specific price or index. Actual transaction prices will reflect quantities, grades and qualities, credit terms, and many other parameters. The prices are in no sense comparable to the quoted prices of commodities in which a formal futures market exists.

Evaluations or calculations of prices and price indices by us are based upon certain market assumptions and evaluation methodologies, and may not conform to prices or information available from third parties. There may be errors or defects in such assumptions or methodologies that

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