During the 13th week of 2008 (March 24-30), most CIS materials for export continued to rise in price, with the only exception being the long products export segment, in which prices retained their previous levels regardless of strong demand. As for scrap and flat product exports of CIS origin, during last week the materials in question reached new highs.
The price rise trend also continued in the Russian and Ukrainian domestic markets during the week ended March 30. On the back of rising domestic prices for raw materials and favorable international sales, finished steel prices in the CIS domestic market continued to reach higher levels.
Scrap: Price for A3 grade scrap rises in all directions
The Black Sea region scrap market was characterized by another rise in the A3 grade scrap price during the 13th week of 2008. As of last week, the A3 grade scrap price went up to levels of above $560/mt CFR for Turkey. Meanwhile, regardless of the continuous price uptrend in finished steel products, steelmakers are reluctant to accept the new increases in scrap prices.
The Russian domestic scrap market continued its upward trend during the week ended March 30. In the week in question, the price for A3 grade scrap increased by Ruble 100-500/mt ($4-21/mt), depending on delivery region, on the back of both scarce domestic supplies and rising scrap prices in the international market.
The scrap prices in the Ukrainian domestic market showed an upward trend during the week in question as well. However, the scrap price rise in the Ukrainian domestic market has a unilateral nature, with several steelmakers increasing their procurement scrap price by UAH 80-100/mt ($16-20/mt).
Longs: Ex-CIS longs offers stop rising
During the week ended March 30, the CIS billet price showed a further increase in the export markets. The largest increase was seen in the offers to Southeast Asia, where the scarcity of this semi-finished product caused buyers to accept almost any offer price. Meanwhile, the offers to the Middle East and Gulf regions, where the market has retained its strong trend, remained unchanged during last week on the back of resistance from buyers.
A relative slowdown in market activity was seen in the CIS longs export markets during the 13th week. Following yet another price rise for finished steel products, buyers refused to buy materials at the offered price.
The CIS domestic markets were characterized by the still rising prices for long products during the last week of March. Traders in the local markets hiked their wire rod and rebar prices following the tendency determined by the domestic producers. Thus, during the week in question rebar went up by Ruble 500-800/mt ($21-34/mt) and the wire rod price rose by Ruble 1,000/mt ($43/mt) in the Russian domestic market. Meanwhile, the rise in the Ukrainian domestic rebar price during the week in question consisting of UAH 150/mt ($30/mt).
Flats: Prices for flat products skyrocket in both domestic and international markets
CIS origin flat products continued to skyrocket in the export market during the 13th week. According to reports, flats of CIS origin started to be offered at levels of above $1,000/mt FOB. Meanwhile, an additional price rise should be expected in the market after April 1 with the new iron ore prices coming into force.
The Russian and Ukrainian domestic flat markets rose in line with developments in the international markets during the week ended March 30. With domestic flats producers setting their April prices at high levels due to growing expenses and the favorable trend in the international market, the domestic markets of Russia and Ukraine have been left in some confusion. Although the two markets in question are experiencing high levels of demand for flat products, both of them are lacking available financial resources to purchase material at the offered prices. As of last week, HR and CR increased by Ruble 600/mt ($26/mt) each in the Russian domestic market, while prices for the same products went up by UAH 240/mt ($48/mt) and UAH 230/mt ($46/mt) respectively in the Ukrainian domestic market. Meanwhile, retail prices in both markets have reached about $1,100/mt for HR and about $1,150/mt for CR. Although domestic traders are trying to reduce the impact of the producers' price rise on the domestic markets in their efforts to maintain a moderate level of buying activity, a continuous price rise by the domestic producers may soon leave the markets in a disastrous state.