During the 19th week of the year export prices for the majority of CIS origin products continued to decrease due to low demand. The only exception during the week in question was structural steel, export prices for which increased on account of the limited supplies available. The CIS domestic markets for flats and longs started to gradually implement the price increases announced by the Russian and Ukrainian producers at the beginning of the month. However, whereas the price increase in the Russian domestic retail market for flats and longs is supported by strong consumption levels, the prices rise in the Ukrainian market is proceeding with some difficulties. As for scrap prices, both Ukrainian and Russian domestic steel producers have so far been successful in pushing prices down.
Scrap: prices continue their fall
Uncertainty prevailed in the Black Sea scrap market during the 19th week of the year. Although the renewal of purchases by Turkish scrap consumers allowed the CIS scrap exporters to increase their prices slightly for A3 scrap, and so level them with the 18th week-quotations for deep-sea scrap, the unwillingness of consumers to accept even this small increase pushed the prices back down to previous levels. This situation once again led to a fall-off in activity in terms of scrap purchases in the Black Sea region scrap market during the week ended May 13.
On the other hand, in the course of the 19th week the Russian domestic scrap market saw yet another price decrease. The calm state of scrap exports allowed Russian steelmakers to dictate another decrease in their procurement scrap prices. Thus, during the week in question A3 grade scrap prices in the Russian domestic market decreased to Ruble 5,850-7,200/mt ($227-279/mt). In addition, market players do not exclude the possibility of an even further scrap price drop in the market.
The Ukrainian domestic scrap market was also governed by a price decreasing trend during the week ended May 13. However, whereas during the first week of May the scrap price decrease totaled UAH 10-15/mt ($3-4/mt), during the week in question the price drop reached UAH 40/mt ($8/mt).
Long products: structural steel on the rise in the export markets
Following the May holidays, the CIS billet exporters entered the markets with a $5/mt decrease in prices during the 19th week. Yet, during the week in question no deals were concluded at these decreased prices. The competition in the export sales markets, as well as the decreasing demand in the main export regions, may push the price of CIS billets down even lower.
As for the long products, a mixed trend was observed in the CIS export markets in the post-holiday period. On the one hand, CIS wire rod and rebar exporters had to decrease their price offers by at least $10/mt, depending on the region and product specifications, under the pressure of a slowdown in activity in the main export markets. On the other hand, the scarcity and lack of supplies observed for structural steel in the export markets allowed the CIS producers to increase their export prices for this product category by $5-10/mt, depending on the product description and the delivery region.
The Russian domestic longs market continued to increase during the week ended May 13. The price increase announced by the domestic producers at the beginning of the month gave large room for maneuver to the domestic traders, who decided to implement their price increase gradually. Thus, during the week in question, the Russian retail market saw a $10-15/mt increase for rebar and even a $20/mt increase in the price of wire rod. In addition, structural steel saw a considerable price rise during the 19th week of the year.
The Ukrainian domestic longs market slowed down a bit during the week ended May 13. Lower domestic demand along with the decreasing trend in the export market all affected the price rise for long products in Ukraine. Thus, although prices continued to rise during the 19th week, the price rise was not as large as in the previous weeks.
Flat rolled: Ukrainian domestic market sees signs of weakening
The CIS flats export markets continued to see decreases in the week ended May 13, with weak demand for flat products affecting the CIS export prices. Thus, during the week in question Russian and Ukrainian origin HR decreased in price by about $20/mt. Meanwhile, CR export prices decreased by $5-40/mt, depending on the offers of the particular producers.
The Russian domestic flats market saw some moderate increases in flats prices during the week ended May 13. Just as in the domestic longs market, the retail market for flats opted in favor of a very gradual implementation of the price rise announced by the flats producers. Thus, during the week in question relatively small increases in the prices for HR and CR were observed.
The situation in the Ukrainian flats market is becoming tougher every week. Although an increase of UAH 10-20/mt for flats was observed in the market, it becoming more difficult for the Ukrainian traders to implement the price rise dictated by the producers at the beginning of the month. With the slowdown in demand for flats, the Ukrainian domestic flats market is little by little entering a deteriorating phase.