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The global steel sector and its raw material suppliers continue to be caught up in trends largely beyond their control. Changes in the steel sector, especially in China, have changed the way raw materials are bought and used. Global political shifts have pushed up oil prices, driving mining and shipping costs higher. The growing availability of scrap, plus the reform of the Chinese steel sector, suggest a shrinking share of steel produced from iron ore and coking coal in the longer term. The steel and raw materials sectors are meanwhile reacting to disruptions in trade flows caused by unpredictable policies in key economies.
The changing markets continue to throw up new opportunities however. New investments in capacity mean new customers for miners and scrap processors around Asia. A shift towards higher value steel products creates a need for higher quality raw materials and value-adding alloys. China’s push to become a bigger player in commodity derivatives provide new opportunities to hedge or profit. With so much going on we all need a roadmap to profit, so come to Kallanish Steel & Raw Materials Trade in Singapore on 23 November to share directions.
Singapore Marriott Tang Plaza Hotel
Address: 320 Orchard Road
Tel: +65 6735 5800
Submit an abstract to be a speaker and join the conference at the Steel & Raw Materials Trade Summit 2018.
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In the aftermath of the great commodity cycle, iron ore and coking coal prices have continuously found new sources of volatility. The impacts of China’s supply-side reforms and changing investment in mining and logistics capacity continue to push and pull prices for blast furnace materials. Diverging and converging spreads for varying qualities and impurities of raw material, create additional risk for miners, traders and end users which must be managed. Meanwhile, the growing importance of portside markets in China are pulling in a different direction to the growth of new markets such as India. Speaker will address these issues and more.
The biggest question mark over steelmaking raw materials markets is the development of scrap markets, especially in China. Will China’s market develop to become more open and efficient? Will supply grow so fast that it becomes an important exporter again? The sector is not only a Chinese story however. Asian scrap trade flows will shift as new capacity comes on-stream in Southeast Asia. The migration of induction furnaces from China in particular could lead to another shift in the market, including the balance between bulk and containerized scrap in the region. In the USA meanwhile, the impact of Trump’s tariffs will have a knock-on effect on scrap availability, creating potential for a tight market I the years to come.
Both raw material and steel trade flows are being affected by a shift in the geography of demand growth. As China slows, to what extent can Southeast Asia and India pick up the slack? Both have seen strong steel demand growth in recent years and expect explosive growth going forward. Both have also seen dramatic fluctuations due to policy changes and other factors. This volatile environment is now the core of investment in new steelmaking capacity, and therefore in steelmaking raw material consumption growth.
The steel sector has been adjusting to new evaluations of the emerging trade wars almost every week in 2017. The US has led the way with the most dramatic announcements, but trade in both steel and raw materials, as well as downstream products, has been a growing issue for years before Trump ran for office. A world of growing trade protectionism could be emerging as countermeasures are announced successively by each trade grouping. Is this an overarching trend or a short term blip for trade? What are the unforeseen dangers of tariffs spreading to other downstream and upstream sectors? Are there opportunities as well as risks as trade flows change?
With so much at stake, sharing views and opinions from across various sectors of the market is becoming ever more important. We will take the opportunity to discuss key trends with some of the seasoned hand and bright young minds in the industry today.
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