UK based MEPS said that Brazilian steelmakers remain cautiously optimistic over the general outlook for domestic steel consumption in the remainder of 2012. Trading volumes in the second quarter have been disrupted by weak market fundamentals and tighter credit restrictions. The country's manufacturing sector has stagnated as a result.

Market sentiment in India has been undermined by negative price expectations and weak underlying demand growth. The Associated Chamber of Commerce & Industry (ASSOCHAM) has lobbied the government to increase the recently revised custom duty on non alloy flat steel products to 10%.

Business confidence in China has been deteriorating in May. Low trading volumes and rising inventory levels have highlighted the necessity for domestic steelmakers to scale back production. Bearish trading companies have issued lower transaction values to free working capital and minimize potential losses ahead of the country's rainy season.

Ukrainian steel consumption has continued to be unsettled by the country's strict credit conditions. Stockists are in no hurry to procure material at the moment.

Challenging business conditions persist in Turkey. The situation is aggravated by the imbalance between demand and supply. Construction activity has stagnated. End user groups plan to steer clear of major flat product purchases. Internal steelmakers have resisted offering discounts and more favorable payment terms, fearing such measures would be counterproductive and only fuel further price instability.

The trading environment remains challenging in the UAE. Stockists plan to postpone purchases until the pricing scenario is more transparent. Shipments to the construction sector and pipe fabricators remain modest.

Source - MEPS - Developing Markets Steel Review