During the 44th week of 2007 (October 29-November 4), the CIS export markets showed different trends in accordance with the separate product groups. On the one hand, a return to full scrap purchases in the Black Sea region was observed during the week. On the other hand, the seasonal slowdown in the Southeast Asian region billet market and the stabilization in the region's longs - which tendencies may soon be followed by price decreases in the region - presented a new threat to the exports of CIS producers. Meanwhile, the CIS flats export market preserved its stability.
As for CIS domestic steel market developments, during the week ended November 4, both the Russian and Ukrainian domestic scrap and flat markets showed stable and calm tendencies. On the other hand, longs in each of the countries saw price reductions in the retail markets.
Scrap: Consumers return to full scrap purchases in Black Sea region
A considerable level of purchase activities was visible in the Black Sea region scrap market during the 44th week. The Turkish scrap consumers, unable to influence the rising freight rates, finally abandoned their efforts to push down the ex-CIS A3 scrap price through abstention from the market. Meanwhile, the other export direction of Russian origin scrap - the Southeast Asian market - continued to trend downward during the week ended November 4, leaving the Russian exporters without alternative export markets.
Both the Russian and Ukrainian domestic scrap markets were characterized by calm trends during the 44th week. Although separate price alterations were seen in both markets, these were due to the scrap needs of particular mills and were not transformed into countrywide tendencies.
Longs: Slowdown in Southeast Asian market threatens well-being of CIS exporters
During the 44th week, the previous slowdown in billet purchase activities in the Middle East markets expanded to the Southeast Asian market, where consumers have almost completed their seasonal purchases. The result was that the CIS billet exporters were left without an additional market for their sales. On the other hand, Iran still continued to show high demand for billets; however, many market players predict this trend may soon end, as local stock levels are getting higher.
Following the developments in the billet markets, the Southeast Asian longs market started to show some signs of stabilization during the 44th week. Although demand in the region is still relatively high, given the decrease in exports from China, the market may soon see a price decline. On the other hand, demand for longs in another CIS export market - Iran - was still high, complemented by a continuous price rise.
During the 44th week, many Russian longs producers entered the market with new decreased prices. This continuous price reduction policy of the Russian longs producers affected the retail market, which showed a decrease of Ruble 400/mt ($24/mt) in rebar and a drop of Ruble 50/mt ($2/mt) in wire rod prices.
The Ukrainian domestic longs market also saw some negative trends during the week ended November 4. Thus, under the impact of new imported steel prices, rebar decreased by UAH 15/mt ($3/mt). In addition, structural steel, the prices for which had been at strong and stable levels over the last couple of months, started to trend downward.
Flats: CIS export and domestic markets register stable trends
Following the recent price adjustment, the main CIS flats export markets returned to their stable trend during the 44th week. Since November will reportedly not bring any new price changes in the flats market, the stable trends are expected to continue till the end of the year.
Both the Russian and Ukrainian domestic flats markets were characterized by calm and stable trends during the week ended November 4, with no significant price fluctuation seen.