During the 12th week of 2008 (March 17-23), resistance to the situation of continuous price increase was seen in the CIS export markets. Although prices went up for both ex-CIS scrap and flats, buying activities were rather sluggish. On the other hand, CIS origin billets saw a stable week as regards prices.
As for the domestic markets, both Russian and Ukrainian finished steel markets saw a price hike during the week ended March 23. However, not much activity was seen in the markets. As for the domestic scrap markets, Russian scrap prices were trending upward while Ukrainian prices saw a slight decrease.
Scrap: Prices in Russian domestic market continue to hike up
During the 12th week of the year, the Black Sea region scrap market was characterized by an upward trend as regards A3 grade scrap. Due to stable growth in both consumption and prices for finished steel products, the exporters of scrap from the Black Sea shore continued to up their prices. In addition, the shortage of available ships for scrap transportation caused the freight rate from CIS southern ports to rise slightly during the week in question, affecting the price of this raw material.
The price for A3 grade scrap continued to rise in the Russian domestic market during the week ended March 23. Many steel mills in Russia were purchasing scrap at levels of more than Ruble 10,000/mt ($420/mt) CPT mill including VAT. The situation is especially critical in the Ural and Far East parts of Russia, where the prices are rising under the influence of the considerable increase in export prices for Far East destinations.
On the other hand, scrap prices in the Ukrainian domestic market saw a slight decrease during the 12th week. During the week in question, the price for A3 grade scrap declined by UAH 14/mt ($3/mt) to UAH 1,776/mt ($535/mt) CPT, excluding railways tariffs.
Longs: Both Russian and Ukrainian longs markets show upward trend in pricing
During the 12th week, not many changes were seen in the CIS billet export markets as regards price offers. Although the markets in the Middle East and Gulf are still showing strong consumption, buyers are not so keen on a further price rise. In the Iranian market not much activity is being seen at the moment due to the New Year holiday in that country. Nevertheless, another price rise is expected from the CIS billet exporters when consumers return to active purchases after the end of Iran's New Year festivities.
As for finished longs products, during the 12th week both ex-CIS rebar and wire rod prices climbed up slowly, reaching new highs.
During the week ended March 23, the Russian domestic longs market saw a rather moderate amount of increase in domestic rebar and wire rod prices. During the week in question, retail rebar and wire rod prices went up by Ruble 300/mt ($13/mt) and Ruble 500/mt ($21/mt) respectively. However, this attempt of domestic traders to keep the domestic prices under control may not be successful, especially taking into consideration the intentions of domestic longs producers to up their April prices.
In the Ukrainian domestic market longs products continued to rise on the back of expectations of a further price rise in April. During the week in question, rebar prices went up by an average of UAH 800/mt ($155/mt) in the Ukrainian retail market. This hike was confronted by end-users who reduced their purchases to a minimum, thus paralyzing activities in the market.
Flats: Consumers reluctant to accept ex-CIS export prices
The price levels of CIS flats for export continued to trend up during the week ended March 23. Although ex-CIS flats are in demand in the Middle East, consumers from Europe and the Mediterranean are largely abstaining from active purchases, considering the prices of over $1,000/mt to be too high.
Retail price offers for flats in both the Russian and Ukrainian domestic markets continued to trend up during the week ended March 23. Thus, during the week in question, HR saw a Ruble 900/mt rise ($38/mt) and CR registered a Ruble 700/mt ($29/mt) increase in the Russian retail market. Meanwhile, HR increased UAH 230/mt ($46/mt) and CR went up UAH 420/mt ($84/mt) in the Ukrainian domestic market. Furthermore, not much activity was seen in either market as end-users consider the continuous price rise to be unsupported by demand.