During the 38th week, the upward trend observed in the
CIS domestic and export markets in earlier weeks finally expired, allowing the different product markets to follow their separate ways. The most noticeable trend of the week was observed in the long products sector, where prices continued their rise in both the
CIS export and domestic markets, regardless of all obstacles. As for the other products, their markets, which had experienced a common revival in the 37th week, followed their differing paths, governed by varying tendencies.
Scrap: Ramadan negatively affects just-revived export market
During the 38th week, the Black sea region
scrap market, which had shown some signs of revival at the beginning of September, became quite again due to the approach of Ramadan. Consequently, the main consumers of CIS-origin
scrap – the Turkish steelmakers- slowed down their purchase activities, causing a drop in A3 grade
scrap prices by on average $5-10/mt. The current silence in the market is expected to be broken not earlier than the end of October. However, everything depends on the Turkish
scrap consumers and their plans to renew purchase activities.
Although
scrap prices continued to decrease in the Russian domestic market during the week ended September 25, this decrease took the form of price leveling rather than significant price change. During the week, the smaller steel producers adjusted their procurement
scrap prices in accordance with the changes made by the larger producers. As a result of this price leveling process, the average price for A3 grade
scrap did not change much, while the price disparities within the country were reduced.
Since the beginning of September, the Ukrainian domestic
scrap market has displayed an upward trend in procurement
scrap prices, with last week being no exception. During the 38th week, Ukrainian steelmakers increased their procurement
scrap prices by a further UAH20-25/mt (approx. $5).
Long products: exports and domestic prices conquer new heights
Due to the continued growth of the
construction industry in the majority of the world's regions and due also to the proximity of Ramadan,
CIS long products exporters were able to hold on to their strong positions in the export markets in the 38th week. In the course of the week, Russian and
Ukraine origin billets continued to move upward, increasing by $15/mt and $5/mt respectively. Although the world market showed a strong demand for other CIS-origin products during the 38th week, this was not enough to redirect supply from the domestic markets which are still strong.
The Russian domestic long products market was still strong in terms of demand but nevertheless produced some decreases in price due to the reluctance on the part of consumers to pay the price asked by the local producers. Due to the overvaluation of domestic goods, many Russian consumers had switched to long products of Egyptian, Turkish and Chinese origin. These imports were not only widely available in the Russian market but were offered at cheaper levels. In spite of this, in the 38th week, the major Russian long producers, such as
Severstal and
Mechel, once again announced a price rise for their products for October shipment.
In the Ukrainian domestic market, as local long product producers continued to redirect greater amounts of their goods to the more attractive Russian market, prices continued to show an upward trend. Thus, in the course of the 38th week,
wire rod rose on average by UAH10/mt (approx. $2), while angle rose on average by UAH20/mt (approx. $4).
Flat rolled: export markets are looking good for future sales
During 38th week,
CIS flat rolled exporters acquired a more favorable position in the export markets, although this did not affect their prices much. According to reports received, many exporters concluded advantageous contracts for October. However, the price levels for CIS-origin flat products continued to differ depending on the delivery region.
Last week, the Russian domestic market still showed little activity in the flat rolled market, while prices decreased slightly in the sector. In the course of the week, HR and
galvanized steel both decreased by 0.5 percent, while CR dropped in price by 0.9 percent.
The Ukrainian domestic flat market showed some upward tendencies in price last week. A 0.2 percent increase was recorded in the price of CR, a 0.4 percent increase in the price of
galvanized steel and a 1.2 percent increase in the price of HR.