At the SteelOrbis Fall 09 Conference & 61st IREPAS Meeting held in Dubai, SteelOrbis had the chance to talk with Mr John Manessis of Hellenic Halyvourgia S.A., Managing Director, regarding his views on the general market outlook. 

- Could you tell us about the current activities of your company? In which markets are you the most active?

Hellenic Halyvourgia is a Greek steel company with two steel plants and rolling mills, one located in Athens and the other one in Volos, northern Greece, producing  about one million metric tons of rebar, wire rod and wire mesh. Our sales are mostly focused on the regional market, i.e., in Greece and also in the Balkans due to their proximity. In addition, we are active in North Africa, most notably in Algeria. Also, since our billet capacity is much bigger (around 1.6 million metric tons), we are also active in the billet export market.

- What is your general sentiment regarding the outlook for today's market?

As the current finished steel markets are weak in general, what is your expectation for the future?

 We expect volatility to persist in the steel markets and that prices will move within a certain band. We believe that we are now approaching a low point again and we believe that a lot will depend on how Chinese domestic demand will evolve. They might surprise us again.

- Do you expect scrap to exert pressure on the finished steel markets in the near future? Do you think the downtrend in scrap will continue? There is also the fact of tight supplies of scrap globally. Which scenario do you think most likely in the long run?

We are experiencing a significant scrap softening (of around US$60/mt), but we believe that as we approach lower price levels the flows will decrease, and that the approach of winter and the China factor will stabilize if not improve scrap prices in the not-too-distant future.

Concerning the scrap supply, we believe it is linked with prices. What we have experienced in the last five years is that when the price of scrap decreases below US$200/mt or €150/mt, the flow decreases significantly. When prices move higher, to US$300/mt or €200/mt, there is a very good flow of material. We believe these tendencies will most likely continue, with some exceptional periods of course.

- What do you think about the current situation in the North African market. Do you see any demand revival in that region soon? How do you see Italian and Spanish producers' presence in the overall North African steel markets in terms of demand and competition?

The demand is there. The problem is that there is too much competition amongst the various players, due to the problems we all face in our domestic markets. Prices are very competitive as we try to substitute domestic demand with Algerian exports.

- It is observed that billet prices are gaining a relative momentum and that the gap is narrowing with rebars in general. Also, demand for billets seems stronger than demand for rebars. How does this affect the finished steel markets and do you see a way out of it?

I believe that in general the melting capacity is smaller and more concentrated than the rolling capacity and that is the reason we have such a phenomenon.

- Which markets do you think will shine as potential buyers?

I believe that the Middle East, North Africa and the Far East will be the markets with this potential. All that of course is subject to China increasing its domestic consumption.

- This the SteelOrbis Fall '09 Conference and 61st IREPAS Meeting and we are in Dubai. What is your impression of the event and what kind of a role do you think IREPAS should undertake in the future?

I believe that the IREPAS meetings are a very good opportunity to meet with people and develop the networking of our companies, and of course to exchange views with the experts in the industry.

The next step for IREPAS and the biggest challenge is whether IREPAS can find ways to interact with the Chinese and Asian associations so that the view we get in these meetings becomes truly global, as at present we are missing the opinion and the interaction of more than 50 percent of the global market for rebars.