During the 11th week of the current year, export price increases were observed as regards all
CIS-origin steel products. As for supplies, only limited volumes were allocated for export due to the growing strength of the domestic markets, especially in the
scrap,
semis and
longs segments. Developments in the
CIS domestic markets during the week ended March 18 resembled the market conditions of last summer, when the local markets were not only able to redirect the materials intended for export but were also able to attract foreign products.
Scrap: Price rises seen in all markets
The Black Sea region
scrap market continued to be very active as regards both price rises and
scrap consumption during the 11th week of the year. The ex-
CIS A3
scrap price, which has been rising since the beginning of the current year, gained another $5-10/mt during the week in question. Foreign buyers of Russian and Ukrainian
scrap seemed to accept the continuous price rise for
scrap due to the great strength of the
semis and
longs markets worldwide, as well as due to the considerable decrease in
scrap export deliveries from the
CIS. In addition, a continuation of the strong upward movement in domestic
scrap prices in both
Russia and
Ukraine could provide strong competition to the export offers. As a result, a further reduction may be seen in
scrap deliveries for export. However, it is difficult to predict for how long steelmakers will be able to accept hikes in the
scrap prices.
The Russian
scrap market was characterized by a leveling of domestic prices during the week ended March 18. The price hikes of the ninth and tenth weeks - announced by major producers first in the European and later in the Ural regions of
Russia - were supported by all other steelmakers who adjusted their prices accordingly. As of last week, the A3
scrap price in the Russian domestic market stood at the level of Ruble 5,800-7,000/mt ($244-268), including VAT.
The Ukrainian domestic
scrap market continued to be governed by a price increase trend during the 11th week of the current year. The price rise totaled UAH 30/mt ($6) during the week in question. Currently, the Ukrainian
scrap market is going through a very difficult stage, the main features of which include increased
consumption rates of
scrap in the market and very favorable conditions for
scrap exports in the international market – against a background of continually falling
scrap collection volumes. Consequently, the domestic steelmakers have to offer the best prices in order to be able to at least partly satisfy their
scrap needs.
Long products: Strong domestic demand once again limits exports deliveries
Due to the active state of the local markets in the
CIS, not many offers of billets were seen in the export markets during the week ended March 18. Ukrainian-origin billets offered for export were practically all supplied to the
Middle East market, while nearly all offers of Russian billets went to
Iran. The price of ex-
CIS billets increased yet another level, up to $540-545/mt FOB Black Sea. In addition, exporters have reported that current offers from the
CIS are for May
production.
The most profitable markets for
CIS longs exporters continued to be
Europe, the
Middle East and the Gulf Region markets during the 11th week. The prices for
rebar and
wire rod in the regions in question seem to rise at a higher rate than in other regions due to strong demand and scarce supply, as well as due to the continuous pressure from the increase in
billet prices. During the week ended March 18, a noticeable decrease in supplies from the
CIS was observed as the local markets continue to gain in strength. Indeed,
longs from other exporting counties such as
Turkey and
China were able to acquire a strong hold in the domestic markets of
Russia and
Ukraine due to their price advantage.
During the 11th week, the Russian domestic
longs market recommenced its price rising trend as the main producers announced their April prices. Following this development, traders revised their
longs quotations in an upward direction. During the week in question
rebar price increased by approximately $10-25/mt, depending on the region, while
wire rod rose by $10/mt. The decision of the local retail market to raise
longs prices by a smaller rate compared to the producers' price adjustment for April (up to seven percent in one go) shows that the market prices will rise further but by small steps at a time. In addition, Russian
longs buyers seem to be buying foreign products more actively since their presence (especially that of Turkish and Chinese goods) started to increase in the local market and since their prices are more competitive.
The Ukrainian domestic
longs market continued its rising trend during the 11th week. The most noticeable increases were observed in the structural steel segment, where angle increased by UAH 40/mt ($8), beam went up by UAH 60/mt ($12), while channel bar rose by UAH 100/mt ($20).
Flat rolled: Price increases finally arrive
During the 11th week, many
CIS producers announced their export prices for April, revising price levels in an upward direction. Although the rate of increase depends on the product specifications and the target market, the most expensive market seems to be
Europe while the largest increase was seen in
plate prices. As for hot rolled and cold rolled products of
CIS-origin, the prices of both went up by at least $50/mt (for instance, according to the market rumor Russian-origin
flats for April are being offered to
Iran at a price $100/mt higher than in March).
The Russian domestic
flats market did not experience as many changes as the local
longs market during the 11th week. A slight increase was observed in hot rolled – up by $4/mt, and in cold rolled – up by $7/mt.
The Ukrainian domestic
flats market was on the rise once again during the week ended March 18. In the course of the week, the cold rolled domestic price gained UAH 30/mt ($6) while the hot rolled domestic price increased by UAH 90/mt ($18). In addition, market players report problems with rolling stocks in the market. This seems likely to lead eventually to a scarcity of finished
flats in the market and to push their prices higher.