During the 38th week (September 15-21) of 2008 the CIS domestic and export markets again showed declining trends. The low levels of business activities and the Ramadan holidays in the Middle East continued to negatively impact offers of CIS semis and finished steel products, while the lack of finished steel sales continued to influence purchase activities in the Black Sea scrap market. As for the domestic markets, although not affected as much as the overall international markets, both the Russian and Ukrainian markets have been touched by the global financial crisis, slowing down market activities in general and in the steel market in particular.
Scrap: Domestic scrap prices in Ukraine and Russia continue to move down
During the 38th week, the Black Sea region scrap market retained its declining trend. As finished steel prices continue to drop while ready-to-sell stocks continue to rise, steel rolling mills are not in any hurry to return to the scrap market for purchases, buying only the minimum volumes necessary.
Meanwhile, prices continue to drop in the Russian and Ukrainian domestic scrap markets as well, which are influenced by the same factors as the international markets. Thus, during the week ended September 21, scrap prices decreased by Ruble 800-1,000/mt ($32-40/mt) in the Russian domestic market, while the same material saw a reduction of UAH 90-100/mt ($18-20/mt) in the Ukrainian domestic market.
Longs: Billet and longs producers wait for end of Ramadan for market to revive
The CIS billet exporters continued to reduce their price offers with the aim of emptying the stocks they had built up since the beginning of the current slowdown in demand. During the week in question offers to the Middle East and Gulf registered a reduction of $10-40/mt, depending on the particular offers to particular countries, while offers to Iran saw a price drop of $30/mt. However, regardless of their continuous price reductions, CIS billet exporters are unable to find buyers in the current market.
Due to low demand and the continuing fall in prices, the CIS rebar exporters preferred to stay out of the market during last week. In general, longs producers are awaiting the end of Ramadan, expecting demand, at least in the Middle East, to pick up at the beginning of October.
Both the Russian and Ukrainian domestic markets continued to show downward trends during the 38th week. During the week in question, the retail price for rebar went down by Ruble 400-1,000/mt ($40/mt) depending on the region in the Russian domestic market, while the price for the same product decreased by UAH 90/mt ($18/mt) in the Ukrainian domestic market.
Flats: Demand for flats still shows no signs of rebound
The CIS export markets for flats continued to be characterized by a slowdown during the week in question. Due to the financial crisis, the low demand level from consumers for steel end-products, including automobiles, white goods, etc., and also because of the Ramadan slowdown in the Middle East, flat products are hardly registering any bookings at the present time. The situation is expected to see a temporary rebound once the month of Ramadan concludes.
Flats prices have continued to decrease as well in the Russian and Ukrainian domestic markets. During the week ended September 21, HR fell by Ruble 200/mt ($8/mt) and CR decreased by Ruble 100/mt ($4/mt) in the Russian domestic market. Meanwhile, HR dropped by UAH 70/mt ($14/mt) and CR declined by UAH 90/mt ($18/mt) in the Ukrainian domestic market.