This week again, with Turkish rebar producers increasing their price levels due to rising scrap and billet prices, rebar prices are also reported to be moving on an upward trend in southern Europe. Market players are wondering when these increases will be reflected in flats prices.
Looking at the southern European countries, no demand revival has been observed in the local markets. However, no price decrease has been registered in the import flat product prices in the Italian domestic market compared to last week. As of this week, the HRC price level in Italy has been at €450-480/mt FOT. While the HRC offers from China have been at €440/mt CFR southern Europe, HRC offers from Russia to Italy have been at €380/mt CFR Italy.
Meanwhile, as flats prices in the Portuguese market have declined by €30/mt ($38/mt) compared to last week, rebar prices have this week increased in this country. This week, HRS prices have been at the levels of €580-600/mt in Portugal. On the other hand, HRC offers from Italy to Portugal have been at a base price of €440/mt ($560/mt) delivered to Portugal. It can be said that demand is currently calm in Portugal.
In Turkey, Ukrainian steelmaker Ilyich's HRC export offers have reached $400/mt FOB Ukraine for December shipment following the deal it concluded in the last week. HRC offers from other Ukrainian producers have this week been in the range of $400-460/mt FOB. Meanwhile, for commercial grade plates, offers from Donetsk have been at $450/mt FOB, while offers from Ilyich have been at $615-620/mt FOB. The Turkish domestic flats market is not very active for the time being either. Additionally, although Erdemir's price lists have remained unchanged, its stock prices have this week declined again.
One of the most important developments in the market this week was the announcement of China's decision to remove export duties on flats as of December 1. With this decision, the export duty of five percent for HRS and HRC and five percent for medium plates will be removed. It is mentioned among the market players that China has made this decision in order to increase its exports and so offset the slowness in the local market. We will see the effects of the decision in question after its implementation. It should be noted that the countries to which China exports most HRC are South Korea and India. Taking into consideration that China exported 2.5 million mt of HRC to South Korea in 2007, the declining HRC imports of South Korea (mainly due to the global financial crisis) may be another factor behind the Chinese decision. In general, it would appear that China is aiming to increase its flats export to the Middle East and European countries.
€1 = US$1.27315/mt