Another riveting week ahead in steel markets?

Last week was a week of two halves for the global ferrous supply chain. From early-to-mid week prices were under pressure, but as the period progressed iron ore kicked up and steel in China and elsewhere followed suit.

One school of thought suggested Chinese production ramping up slower than anticipated — to cash in on the price uptick — was the cause for some of the bullishness. “Because of their losses, Chinese mills are generally not eager to boost their production, and therefore steel output, despite some recovery, has stayed low compared with early last year,” one steelmaker said.

Two other steelmakers in northern and western China said their mills had idled blast furnaces late last year and would not be relighting them despite the uptick.

Despite the rises toward the end of the week, the general feeling across most markets appeared to be anxiety and a lack of visibility. Across many markets Platts frontline reporters were told “I don’t know the price today” by a variety of buy- and sell-side sources. “Yo-yo” was a favored way of describing the volatile movements.

The Chinese billet market was particularly confused, with mills reportedly defaulting on contracts when prices rose and buyers following suit as they collapsed. Some sources said buyers were rebooking the same material at much higher prices, impacting as much as 1 million mt. Prices from CIS slab suppliers were also seesawing throughout the week following the developments in China.

Global slab supply seemed tighter. Several Black Sea-based mills left the slab merchant market suggesting they had been sold out for some time. Some buyers tried Brazilian mills, which said their production was fully booked until June. Iranian mills also had limited tonnage to export, sources said.

In markets such as Turkey — a large recipient of Chinese and CIS semis in recent months — all this filtered into much stronger scrap pricing as there was a lack of suitable alternatives, and mills looked to take advantage of brisk domestic rebar demand, although some said the market was cooling a touch.

European and UK coil producers were going gung-ho for rises amid a lack of import competition; the presence of seemingly cheap Chinese forward offers has weighed heavy on domestic mills in recent years, but cheaper forward prices were not seemingly available. UK mills were being aided by the weak sterling, as “Brexit” uncertainty continued to beat the currency down.

What will happen this week? Your guess is as good as mine.