The activity seen in the rebar market, caused by the purchases from Egypt, slowed down last week; nevertheless this activity gave a boost to the long product markets at the end of April. It may be said that the development observed in the longs market has also led to a rise in optimism in the flats market. With the commencement of May, an increase has been expected in the flats prices in European countries in particular; however, the activity seen in the domestic markets have yet to be reflected as price increases. Although the anticipated increases are not very high, e.g. €20/mt, no change has yet been observed in actual price levels.
On the other hand, Indian is still a buyer country. Most mills located in the CIS countries in particular have filled their order books up to the end of May on the back of India's purchases. However, demand from India may decrease slightly due to the approaching monsoon rains in this region. Currently, India is still an important target market for flats producers and most mills are trying to sell their materials to this market. India is an important market even for South Korea which was an importing country up to this year. A few bookings heard recently have been concluded from South Korea to India. Also, Vietnam is currently an active buyer. However, it should be considered that the monsoon season is also approaching for Vietnam. On the other hand, China has decreased its purchases due to the slowdown in its local market, while prices have shown increases against the background of diminished stocks in the Chinese domestic market. In addition, the annual iron ore contract talks have not concluded yet. China is seeking a price cut, whereas the iron ore suppliers are insisting on not lowering their prices. Even Rio Tinto has recently announced that they will not accept a discount of 40 percent.
CIS countries have also concluded bookings to Europe and North Africa as well as to India, Vietnam and Thailand. The volume of orders of CIS mills is lower for CRC and plate than for HRC. The price levels for June production HRC offers will be clarified within the current week. CIS mills intend to raise their prices for HRC in particular. Any possible increase in prices will depend on demand from buyers.
Looking at the southern European countries, it is seen that a more optimistic atmosphere has started to predominate in these markets, though no change is observed in terms of price levels. This optimism is driven by inventories' starting to decline and the activity, even if slight, experienced in demand levels. As for local sales prices in Italy, HRC is in the range of €315-330/mt FOT, while CRC is at €420/mt FOT. These price levels have recorded no change since the first week of May. Base prices of the producers of HRC and CRC are also at the same levels as local market levels. Also, the most recent HRC offers given from Ukraine to Italy are at the level of €305/mt CFR. In general, in offers given to southern Europe, CRC base prices are in the range of €370-380/mt CFR, while HDG prices are at €440-450/mt CFR. Meanwhile, a producer in Italy has concluded a deal from Egypt for May production HRC. In the Portuguese flats market prices have remained the same, with HRC prices in the range of €430-440/mt ex-warehouse. Also, no change is observed in offers given from Italy and Spain to Portugal. HRC offers given from Italy are at the base price level of €335/mt, while HDG offers from Italy are at €420/mt - both delivered to Portugal.
Bookings have been concluded to other regions besides the Far East thanks to the current optimism in the markets, the belief that prices are at bottom levels, and also due to diminishing stock levels.