During the 22nd week of 2007, the CIS export markets for the majority of products (except scrap) stalled their activity in anticipation of the Chinese exporters' next move, as China's new export duty entered into effect. Although small price decreases were seen in regard to CIS-origin longs and flats products, the new price stance of the Chinese exporters seems likely to be a decisive factor in the world's price trends for at least the next month. In the CIS export scrap market, the low level of foreign consumers' stocks forced them to renew purchases temporarily. However, because of price disagreements, no one knows for how long the purchases will continue this time. In the CIS domestic markets the scrap price continued to fall during the week ended June 3. Meanwhile, whereas calm was observed in the Russian domestic longs and flats markets, the Ukrainian domestic longs and flats markets saw some negative price corrections due to low demand.
Scrap: Foreign consumers renew purchases due to low stocks
During the 22nd week of 2007, the Black Sea region scrap market showed some signs of reactivation. Although Turkish consumers still disagreed with the prices asked for deep sea and A3 grade scrap, the lessening of available scrap stocks forced them to come back to the market. Yet because of the continuing disagreements over scrap prices, the purchases concluded during the week in question were considerably small.
Due to the increasing amount of offers, the Russian domestic market experienced a further decrease in prices during the 22nd week, with a price drop of Ruble 150/mt ($6/mt) seen in the market.
The Ukrainian domestic market also continued its downward trend during the week ended June 3. As in the Russian domestic market, the relative calm in the direction of exports, as well as the increase in the volumes of domestic scrap offers, all contributed to pushing the price down further by UAH 10/mt ($2/mt).
However, the slowdown in the rates of decrease in both the Russian and Ukrainian domestic scrap markets gives hope that prices will stabilize soon.
Long Products: CIS domestic markets stall activity and wait for next Chinese move
The CIS billet export markets during the week ended June 3 remained more or less stable. Both suppliers and consumers were waiting for the Chinese exporters' next move after the imposition of the new export taxes. The new global trend will most likely mainly depend on the price stance which the Chinese exporters adopt.
In the longs export markets, the CIS exporters were unable to sustain their previous quotations in the Middle East and Gulf region due to the slow demand. As a result the prices for rebar and wire rod fell on average by $5/mt during the 22nd week of the year.
Calm was the main characteristic of the Russian domestic longs market during the 22nd week of the current year. Although slight corrections were seen for rebar and wire rod prices during the week, the retail market is waiting for the new producer prices in order to make its next move.
A decreasing trend prevailed in the Ukrainian domestic longs market during the week ended June 3. Traders, who could no longer sustain their prices, have had to decrease their quotations slightly for some products regardless of the possibility of a new rise in producers' prices for June. Thus, during the 22nd week, the retail price for rebar decreased by UAH 8/mt ($2/mt). Meanwhile, the quotations for other long products underwent only slight negative corrections.
Flat rolled: Ukrainian domestic prices fall due to low demand
A small price decrease was seen in the main CIS flat export markets during the week ended June 3. In the course of the week, CIS HR offers decreased further by $5/mt, while CR remained relatively stable. As in the semis and longs markets, future market developments will depend on the next step of the Chinese exporters, who will surely want to be compensated for the export tax. However, the question of whether buyers will accept this move still remains open.
The Russian domestic flats market was stable during the week in question, with no price fluctuation observed in the market.
Flats in the Ukrainian domestic market, on the other hand, underwent considerable changes. In the course of the 22nd week, the retail price for HR decreased by UAH 30/mt ($6/mt), CR declined by UAH 10/mt ($2/mt), while galvanized steel dropped by UAH 40/mt ($8).