During the 37th week of 2008 (September 8-14), both CIS domestic and export markets continued to follow previously-settled trends. With regard to the export markets, a continuation of the price reduction tendencies could be seen in the ex-CIS billet, longs and flats markets. As for the CIS domestic markets, the week in question did not bring any changes either in the previously-established market conditions, with price decline tendencies continuing to govern both the Russian and Ukrainian domestic markets for all types of products.
Scrap: No sale activities seen in Black Sea region scrap market
The Black Sea region scrap market continued to be calm as regards scrap purchase activity during the 37th week. Due to the continuing sluggishness of the finished steel market, Turkish steel producers continue to abstain from almost all scrap purchases apart from a necessary minimum, in an effort to push scrap prices down. In such efforts, scrap consumers were partly successful in relation to ex-US and ex-Europe scrap offers during last week. As for ex-CIS A3 grade scrap, no deals were concluded during the week in question.
Meanwhile, price decreasing trends prevailed in both the Russian and Ukrainian domestic markets for scrap. The absence of competition from the ports, the rather high level of domestic stocks for the season and also the sluggish state of both the domestic and international markets for finished steel all influenced the scrap purchases of the domestic steel mills and, therefore, their procurement scrap prices. In Russia, the procurement price for A3 grade scrap saw an average drop of Ruble 400-500/mt ($17-20/mt) depending on the region, while in Ukraine scrap prices decreased UAH 200-300/mt ($42-62/mt) depending on the steel producer.
Longs: Ex-CIS billets and longs post continued drop in quotations
The CIS export markets still failed to show any demand for billets during the week ended September 14, forcing exporters to reduce their billets offers. During the week in question, ex-Black Sea billet offers saw a reduction of about $90/mt while ex-Caspian Sea billets offers registered a drop of $90/mt. The main reasons for such drops in prices continued to be the low level of business activities in the Middle East, Gulf and Iran markets due to the month of Ramadan and also the general slowdown in the international steel market.
CIS export offers for long products also saw a reduction in price during the week in question. Due to the impact of the financial crisis on construction activities, many construction firms postponed the implementation of their projects and, therefore, reduced or even stopped their steel purchases. This situation resulted in reduced demand for steel, with a dramatic reduction seen in demand for rebar, thereby pushing down prices.
The Russian and Ukrainian domestic markets continued to see a price decrease in longs during the week ended September 14. During the given week, the rebar price decreased by an average of Ruble 600/mt ($24/mt), depending on the region. The price drop in Ukraine during the week in question totaled UAH 120/mt ($25/mt). Meanwhile, a price drop in construction steel is expected to continue in the CIS domestic market for some time.
Flats: Ex-CIS flats offers continue to decline
Offers of CIS-origin flats continued to drop down in price in the export markets during the 37th week. The low level of business activity, the sharp increase in volumes of offers from China and also the month of Ramadan (in relation to the Middle East, Iran and Gulf markets) all contributed to pushing down ex-CIS flats offers. The latest offers of HRC of Russian origin hover just above the $900/mt mark, depending on the target market, while the same products of Ukrainian origin went down below the $900/mt level.
Meanwhile, the rate of decrease of flats prices saw a slowdown in the Russian domestic market. Although both HR and CR continued to show downward corrections in their prices during the 37th week, the price corrections were smaller compared to previous weeks.
On the other hand, the Ukrainian domestic market registered an impressive drop in flats prices during the week ended September 14. During the week in question, the HR price fell by UAH 60/mt ($13/mt), while the CR price went down by UAH 90/mt ($19/mt).