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Semis ex-CIS in Middle Eastern market : current state and future outlook

Semis ex-CIS in Middle Eastern market : current state and future outlook. SBB Steel Market Middle East April 28-29 2008, Dubai, UAE. Svetlana Delamure Editor Metal Expert Weekly / Metal Expert News. Metal Expert in brief:. Part of Information agency Metal Courier established in 1994

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Semis ex-CIS in Middle Eastern market : current state and future outlook

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  1. Semis ex-CIS in Middle Eastern market: current state and future outlook SBB Steel Market Middle East April 28-29 2008, Dubai, UAE Svetlana Delamure Editor Metal Expert Weekly / Metal Expert News

  2. Metal Expert in brief: • Part of Information agency Metal Courier established in 1994 • Reliable source of information on global, and CIS in particular, steel and raw materials markets • Provider of daily news, weekly reviews, monthly analytical bulletins, quarterly forecasts, special reports and consulting services both in English and Russian • Offices in Dnipropetrovs'k (Ukraine), Moscow (Russia), and Houston (Texas, USA)

  3. Middle East in the world steel semis trade today… 6 major importing countries Iran, Syria, Saudi Arabia, UAE, Jordan, Oman 18%(5.8mt) of billet imported globally 3% (0.9mt) of globally traded slabs Share of semis ex-CIS supplied to Middle East – 85%

  4. Middle Eastern countries import mainly billets… Share of semis from CIS has been growing constantly for the last 3 years … Middle East is an important market for CIS suppliers, consuming… 23% of Russian semis 13% of Ukrainian, and 85% of Kazakh billet and slabs

  5. Middle East increased semis import significantly Most countries of the region import square billet… …and only two buy slabs …but growth rates are impressing in both cases

  6. What is behind increased billet consumption? The major reason is extremely high construction activity in the region, especially in Iran and UAE, and other countries are on their way… Middle East domestic rebar prices, $/t exw During 2007 rebar shipments to the region went up by 2mln tonnes year-on-year, mainly to Iran +1mt UAE +1mt Rerollers’ demand for imported billet was estimated at around 7.6mt in 2007 with account of new capacities launched

  7. Other factors supporting billet prices… Crude steel production costs, $/t Raw materials costs Absence of Chinese semis due to high costs and 25% export duty ‘Newly’ emerged semis market in South East Asia Consolidation of CIS semis production Export price for Chinese billet with production costs of $600/t is around $890-900/t fob = $970-980/t c&f Gulf

  8. Even more factors… Freight rates, $/t Freight rates Logistics problems in the Caspian and Black Sea ports in winter USD depreciation Financial restrictions while working with Iran

  9. All the factors mentioned resulted in higher billet prices… will the situations persist? Imported billet prices, $/t c&f Some figures for Middle East market Imported billet prices – by 65-75% Average domestic rebar prices grew 55-70% since May 2007 Freight rates – by 30% in case of Odessa-Dubai route and 133% in Astrakhan-Anzali case

  10. Billet prices promise to be strong in 2008 due to… • Demand side: • Strong rebar demand and shortage in Middle East will maintain high rebar prices which supports rerollers demand for billet • New steel-making facilities to be introduced in 2008 won’t be brought to full capacity within the year

  11. Billet prices promise to be strong in 2008 due to… • Supply side: • Absence of Chinese billet in the market due to high production costs and export duty ‘gives freedom’ Turkish and CIS suppliers • In 2007 Russia and Ukraine decreased billet exports by 480,000t and 600,000t respectively • Russian Yartsevo and Rostov mini-mills will launch rolling capacities of 750,000t totally in 2008, though… • In Ukraine new billet producer emerged – Electrostal – with 300,000tpy capacity • Turkey will add about 2.9mt of crude steel capacity vs 1.9mt rolling capacity, but it will partially offset existing billet shortage in Turkish market

  12. The latest global prices and trends every Monday • Products: • Scrap • Pig iron • Billet • Steel long products • Freight • Regions: • Turkey • CIS (Russia, Ukraine, Kazakhstan) • South Europe (Italy, Spain) • Central Europe (Poland, Bulgaria, Romania) • Middle East (Iran, UAE, Syria, Saudi Arabia, Jordan) • North Africa (Egypt, Algeria) • US • China • South East Asia (Taiwan, Thailand, Vietnam, Philippines, Singapore)

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