During the fifth week of 2008 (January 28-February 3) trends varied in the CIS export markets according to product group. On the one hand, the CIS scrap export markets were calm due to both a seasonal decrease in scrap availability and also due to the reluctance of scrap consumers to pay the asked price. On the other hand, both longs and flats export markets were relatively stable during the week in question. However, the consumers in the concerned markets are expecting the announcement of new prices, which most probably will be higher than the current ones.
As for the CIS domestic markets, during the week ended February 3 both Russian and Ukrainian flats and longs markets saw a continuation of their upward trends. Meanwhile, the Russian domestic scrap market continued to see a price increase, whereas its Ukrainian counterpart stabilized a little.
Scrap: Price rise continues in Russian domestic market
During the fifth week of the year, the Black Sea region scrap market continued to be rather calm and even a slight decrease in the freight rate and a consequent reduction in the CFR-based price did not push the Turkish steel mills to return to active purchases. Meanwhile, the seasonal reduction in scrap processing negatively affected the quantity of scrap exports from Russia's Far East ports, thereby also affecting the number of concluded deals.
The Russian domestic scrap market continued to experience a price rise during the week ended February 3. Due to the seasonal slowdown in scrap collection and the relative lowering of scrap stocks, steel mills hiked their procurement scrap price by about Ruble 50-100/mt ($2-4/mt), depending on the region.
On the other hand, the Ukrainian domestic scrap market saw a relative stabilization during the fifth week of the year. During the week in question, both domestic scrap deliveries and prices were stable and even a small reduction was seen in the scrap purchase prices of some mills.
Longs: Full revival seen in CIS domestic rebar markets
During the week ended February 3, CIS-origin billets were stable in price for export to the Middle East. However, due to scarcity of this material in the Southeast Asian market, ex-CIS billets saw a rise in their export offers.
In regard to finished long steel products, during the week in question, both rebar and wire rod of CIS origin retained their stability. However, the purchase strategy for these products has undergone a change in the Middle East and Gulf markets due to the expectation of new price announcements. Whereas during previous weeks the markets in question consumed as much longs as they could, during the week in question consumers started to purchase only the limited amounts of steel necessary to cater for immediate demand.
The Russian domestic longs market continued to see a revival during the fifth week. During the week in question, the retail rebar price increased by an average of Ruble 500/mt ($20/mt) while the wire rod price in the Russian retail market went up by Ruble 200/mt ($8/mt).
The Ukrainian domestic longs market was relatively stable during the week ended February 3. The retail price for rebar increased UAH 40/mt ($8/mt).
Flats: CIS exporters get ready for another price rise
During the week ended February 3, the ex-CIS flats export market was relatively stable, with minor changes occurring in the market. However, this calm trend constitutes a transitory stillness before the new price rise rather than a more lasting stability. Indeed, several steelmakers have already confirmed this prediction by repeatedly raising their prices for current offers.
Meanwhile, the Russian domestic flats market continued to gain speed during the week ended February 3. During the week in question, HR increased by Ruble 400/mt ($16/mt), CR went up by Ruble 350/mt ($14/mt) and galvanized climbed Ruble 500/mt ($20/mt), all in the Russian retail market.
Meanwhile, the Ukrainian domestic market saw an upward trend in the retail market only as regards HR and CR steels. Thus during the week in question, CR increased by UAH 80/mt ($16/mt) and HR rose by UAH 60/mt ($12/mt), under pressure from both local demand and producers' increase for their February domestic prices.