During the third week of 2008 (January 14-20), the CIS export markets saw mixed trends depending on product group and delivery region. On the one hand, ex-CIS semis, longs and flats saw yet another price rise during the week ended January 20. On the other hand, the trends in the ex-CIS scrap export markets varied depending on the export regions.
As for the CIS domestic markets, most products groups were either stable or saw a price rise during the week in question. The only exception was the Russian flats market, which experienced a negative trend for the majority of products.
Scrap: Russian and Ukrainian scrap prices on the rise
During the third week of the year, the Black Sea region scrap market entered a calm phase with few bookings of ex-CIS scrap concluded. The tranquility in the market has resulted from the opposition of Turkish scrap consumers to the growing scrap prices, which increased to levels of above $450/mt CIF Turkey. The general slowdown in the market is expected to continue until the beginning of February, regardless of Turkish steel producers' current scrap needs. On the other hand, ex-Far East Russian scrap prices are maintaining their upward trend - although the amount offered is limited - mainly due to the considerable hike in the prices of semi-finished steel in the Southeast Asian market.
The Russian domestic market continued to show a positive trend in its scrap market during the week ended January 20. Due to increasing pressure from exports, where prices have increased considerably, the Russian domestic steelmakers had no choice but to up their procurement scrap prices in order to sustain the continuous flow of scrap to their mills. The price increase registered during the week in question was around Ruble 50-70/mt ($2-3/mt).
A similar trend was observed in the Ukrainian domestic scrap market during the week ended January 20. Toward the end of the week, Ukrainian steel mills increased their procurement price for A3 grade scrap by about UAH 130/mt ($26/mt), depending on the steel producer, to UAH 1,500-1,600/mt ($296-316/mt), CPT mill, excluding railway tariffs and VAT, under pressure from domestic scrap suppliers.
Longs: Slowdown observed in export offer increase rate
During the third week of the year, the strong demand for CIS billet continued to push up the export price for this material for most export directions - e.g. Middle East and Gulf region, Iran, and North Africa. However, the rate of increase during the week in question decreased somewhat, with a rise of only around $10-20/mt seen, depending on the delivery region. This slowdown tendency may mean the approaching end of strong demand for billet and eventual market stabilization.
On the other hand, finished long products of CIS origin continued to rise in price in the export markets, to which the European market was added during the week ended January 20. In the period in question, the ex-CIS rebar price gained about $10-15/mt, while wire rod of the same origin remained on a stable trend.
The Russian domestic market experienced an even higher price increase in the rebar retail market during the week ended January 20. Under the effect of the international price rise for rebar, the price for this long product went up by Ruble 300-800/mt ($12-32/mt) in the Russian retail market. Meanwhile, the wire rod price in the Russian domestic market stood still during the third week.
The Ukrainian longs domestic market followed an upward trend during the week in question due to the strengthening of domestic demand and the increasing rebar prices in the world market. Thus, during the week ended January 20, the rebar price in Ukraine's retail market went up by UAH 50/mt ($10/mt).
Flats: CIS flats exports maintain price uptrend
Ex-CIS flats exports continued to show an upward trend in prices in the various export markets, as more and more producers came with new increased offers to the market. For instance, for the Turkish market, ex-CIS hot rolled offer prices reached the level of $660/mt CIF (price varying depending on the producer); meanwhile, cold rolled offer prices were hovering around $760/mt CIF (price varying depending on the producer). Meanwhile, the activation of the European market allowed the Russian and Ukrainian producers to increase their export offers to this region as well.
The Russian domestic flats market saw mixed trends during the third week of 2008. On the one hand, HR and galvanized steel saw slight decreases in their retail prices. On the other hand, CR retail prices preserved their stability.
The Ukrainian domestic flats market, supported by the strengthening of domestic demand and the increased prices of producers, followed a price rising trend as regards HR and CR. Thus, the retail prices for both HR and CR increased by UAH 30-50/mt ($6-10/mt), depending on the material offered, during the week in question.