During the 20th week of 2007, the CIS exporters lowered their prices even further for almost all products. The only exceptions to this trend have been Russian-origin flats from Far East Russian ports, which saw an increase in the week in question, and also scrap, the market for which remained calm. In the Russian and Ukrainian domestic markets, mixed tendencies were observed, depending on the various product groups. On the one hand, both the Russian and Ukrainian scrap markets saw a price decrease due to the seasonal rise in scrap collection volumes and also due to the calm trend in the export markets. On the other hand, the Russian and Ukrainian longs markets saw some slowdown in their usual increase trend. As for the domestic flats markets, both of the CIS markets in question experienced some minor negative corrections.
Scrap: Consumers of CIS-origin scrap reluctant to accept prices
During the 20th week an atmosphere of calm governed the Black Sea region scrap market. Although they were having some problems with their scrap supplies, Turkish scrap consumers were reluctant to accept even the decreased offers of CIS-origin scrap, which were in a range of $315-325/mt CFR Turkish ports. On the other hand, the seasonal increase in scrap collection in Russia and Ukraine led to an increase in the volumes of scrap offers both for export and for the domestic markets. However, the higher amount of offers may only lead to a further decrease in export quotations.
The Russian domestic market was once again characterized by a downward trend during the week ended May 20. The long-standing situation of insignificant sales levels in the export markets, along with the increasing level of scrap collection inside the country, has contributed to the Russian domestic scrap price fall, which totaled Ruble100/mt ($3/mt) during the week in question.
The Ukrainian domestic scrap market also registered a price decrease in the course of the week ended May 20. The domestic steel producers, supported by the quiet export situation, were able to press for a UAH 35/mt ($7/mt) decrease in the A3 grade scrap price.
Long products: Export prices see fresh decrease
Following a $5/mt decrease in the 19th week, CIS billet exporters decreased their prices further by $10/mt during the 20th week, inspired by the low level of demand especially in the Middle East and Gulf regions. However, the situation may assume a different direction following the decision of the Chinese authorities to increase steel export tariffs. Till then, the very strong longs markets of the CIS countries will be able to compensate for possible losses in exports.
In the CIS longs export markets, a decrease of $35/mt for North Africa and a slight fall for other markets was seen in the prices of the Ukrainian wire rod and rebar exporters during the week ended May 20. Although they have already announced a decrease in the prices for June production, the exporters are still facing difficulties in competing with Turkish and Chinese exporters in the Middle East and with the Italians in North Africa.
The Russian domestic longs market saw some slowdown in the price rise trend during the 20th week. Although an increase in the domestic longs segment was still the main characteristic of the Russian market, last's week rise was not that considerable: rebar increased Ruble 200/mt ($8/mt) and wire rod went up by Ruble 450/mt ($17/mt). However, due to the strengthening of the US dollar against the Russian Ruble, Russian domestic longs prices saw a small decrease in the US dollar equivalent.
The Ukrainian domestic longs market continued to experience difficulties in implementing the producers' May price rise during the week ended May 11. Although the domestic traders continued to press for higher prices (during the week in question rebar, channel bar and angle increased in price by an average of UAH 40/mt ($8/mt)), the market seems to be reluctant to accept yet another increase. Consequently, the long product stocks in the warehouses of the domestic traders continue to increase.
Flat rolled: Black Sea export prices continue to deteriorate
Some negative corrections in the prices for CIS-origin flat products were observed during the 20th week as regards exports in western directions. Thus, during the week in question, both CIS-origin HR FOB Black Sea and CR FOB Black prices decreased by $5/mt. On the other hand, a slight resurgence of activity in the Southeast Asian markets allowed Russian exporters to up their flats prices by $20/mt.
The Russian domestic flats market saw some negative tendencies during the week ended May 20. In the course of the week, HR decreased by Ruble 400/mt ($14/mt) while the CR price dropped by Ruble 300/mt ($12/mt). These decreases may be explained by the domestic producers' intentions to lower their June domestic prices due to the slowdown in domestic demand and in export deliveries.
The Ukrainian domestic flats market was relatively stable during the 20th week, with only a minor adjustment seen in prices.