MCI - Metals Consulting International

Iran achieved a historical high in DRI (Direct Reduced Iron) / HBI (Hot Briquetted Iron) exports in 2023, supplying approximately 1150kt of raw materials to international markets. During January-February 2024, shipments of the raw materials remained high with around 180kt exported in the first two months of the year. Oman emerged as the leading destination for DRI exports, while exports of HBI were directed to India, Iraq, and Pakistan.

Based on analysis utilizing HM Revenue & Customs data, the UK flats market exhibited mixed trends across specific product categories: - HRC Imports: Decreased to 11kt, though remaining above the modal values observed during the last TRQ period. - CRC Imports: Increased to 15kt, propelled by a larger intake of material from India and Other sources. - HDG Imports: Reduced to 20kt, with India's quota exhausted and material now arriving from the EU and Other origins. - PP Imports: Increased to 4kt, largely driven by the arrival of material from South Korea.

Over the past week, activity in the EU import market has shown improvement, surpassing recent averages: -Flats Imports: Among the most active segments, with volumes exceeding 400kt. This surge is primarily driven by HDG (Hot-Dip Galvanized), alongside a slight increase in CRC (Cold Rolled Coil) imports and a decrease in HRC (Hot Rolled Coil), HRP (Hot Rolled Plate), and PP (Pre-painted) intake. -Longs Imports: Imports of carbon longs experienced a slowdown, totaling 82kt, with activity decreasing across all product groups except for rebars. -Stainless Steel Imports: The imports decreased to 14,6kt backed by the mixed trends in the specific products. I.e. stainless bars, wire rods and CRC imports declined amid larger quantities in HRC and plates. -Imports of tube & pipes increased to 37,5kt primarily driven by large-diameter pipes segment. The remaining volumes from the previous TRQ period from January 1 to March 31, 2024, have not yet been transferred to the current period.

In March 2024, Brazil experienced a significant increase in exports of pig iron, rising by 15.5% to reach 335kt of deliveries. Almost all of these volumes were targeted at the US market.

In March 2024, exports of iron ore from Brazil experienced a decline of 5.6% compared to February 2024 and a decrease of 1.9% compared to March 2023. Contrastingly, there was a 6.5% decrease in deliveries of iron ores and concentrates, while shipments of pellets increased by 7.2% in March 2024 compared to the previous month. This discrepancy can be attributed to changes in the geographical structure of deliveries. The reduction in Brazilian exports to China, Oman, and Malaysia in March 2024 was offset by higher shipments to Japan and other markets.

The new TRQ period commenced with a significant increase in quotas allocation, including volumes allocated from the previous quarter: - Imports of flats surged by over 2 Mt, primarily driven by HRC intake. Some suppliers, including "Others" for HRC, China, and India for Metal Coated, and India for PPGI, have already fully utilized their quotas for the period from April 1 to June 30, 2024. - Imports of longs increased to over 300kt, with the wire rod segment showing the most activity. Turkey and Malaysia have nearly exhausted their quarterly product quotas. - Stainless steel imports rose to almost 50kt, predominantly due to a large intake of stainless bars from India, with the quota almost fully exhausted by now. - Imports of tube & pipes increased to 78kt. Turkey has almost fully utilized the quotas for hollow sections and LDP. The remaining volumes from the previous TRQ period from January 1 to March 31, 2024, have not yet been transferred to the current period.

Based on the analysis conducted using HM Revenue & Customs data, the start of the new quota period showed significant activity in the UK flats market: - Allocation of HRC import quotas reached approximately 18kt, with the "Other" suppliers group utilizing almost 50% of the quota, while Turkish exporters utilized over 10% of their quota. - CRC imports increased to around 8kt, with the "Others" origins group now utilizing approximately 70% of the quota, while minor imports were recorded from the EU and South Korea. - In the Metal coated products sector, imports rose to 29kt with Indian suppliers fully utilizing their quotas, while minor imports were tracked from the EU. - PPGI import market activity remained low.

There was a noticeable drop in import market activity in the EU27 in the pre-Easter week: - Imports of flats decreased by half, falling to 146kt. - Imports of longs remained relatively stable at around 45kt but were below recent averages. - Stainless steel imports also halved, declining to 9kt. - Utilization of tube & pipes quotas decreased to 16kt during the week. No allocations of volumes for the new period (01.04-30.06.2024) have been made yet, but significant volumes of quotas from the most active suppliers are already awaiting allocation.

Based on the analysis conducted using HM Revenue & Customs data, pre-Easter activity in the UK import market remained robust in non-coated product categories: - Allocation of HRC import quotas reached approximately 13kt, surpassing recent averages. - CRC imports decreased to approximately 1kt, while 6.9kt have already been allocated to the "Others" origins group for the period spanning from April 2, 2024, to June 30, 2024. - Activity in the metal coated products sector experienced a reduction. - PPGI import market activity also remained subdued.

According to recent data from the European Commission, business confidence in March 2024 saw a decline in both the Basic Metals segment and key consuming sectors: - Basic Metals Segment: Confidence declined due to lower production expectations, influenced by weaker price sentiments, excessive assessment of stocks, and a worsened evaluation of order books. - Automotive Segment: Sentiments worsened due to a more pessimistic view on production expectations and weak assessments of order books. - General Industry: Remains generally stable across all major parameters assessed. - Fabricated Metals Production: Shows similarly weak sentiments, also trending sideways. - Construction: Exhibits a more positive outlook, driven by higher seasonal activities, improving employment expectations, and order books. Observed trends vary across major European economies.