During the 24th week of 2007 the CIS export markets were governed by different trends depending on the various product groups. On the one hand, tensions between suppliers and consumers over price levels prevailed in the CIS export market. On the other, the CIS longs export markets are still inactive, waiting for the reaction of consumers to the recent Chinese policy changes. Meanwhile, CIS flats started to increase their presence in the Mediterranean region but began to see a decrease elsewhere in Europe. In the domestic markets diverse trends have been prevailing. Whereas the Russian market has shown relative stability in almost all product groups, Ukraine saw a price drop in the scrap market, mixed trends in longs and stability in flats.
Scrap: Tensions continue in the CIS export market
The tensions between suppliers and consumers regarding price levels were still in evidence during the 24th week in the Black Sea region scrap market. On the one hand, the CIS exporters were not willing to decrease their scrap price offers further due to the reactivation of purchases in the Southeast Asian market. On the other hand, the Turkish consumers, who were able to push down prices for deep sea scrap, were reluctant to pay more than $315/mt CIF Turkish ports (i.e. the previously accepted price) for CIS-origin A3 scrap.
The slowdown in export activities continued to affect the Russian and Ukrainian domestic scrap markets during the week ended June 17. The situation in the Russian domestic market was governed by stability regarding the price policies of the domestic steelmakers. However, the return of the Southeast Asian consumers to scrap purchases may cause prices to rise in the Ural and Far East territories of the Russian Federation. This in turn may cause a chain reaction involving all Russian steelmakers. On the other hand, A3 grade scrap in the Ukrainian domestic market dropped another UAH 15/mt ($3/mt) during the third week of June.
Long products: Ex-CIS billet prices have started to drop
The implementation of the Chinese export taxes did not bring the desired results for the CIS billet exporters. Although the Chinese exporters raised their billets offers for the Middle East and Gulf region, the market demand for billets is too weak to accept an increase in prices. As a result, in general the CIS billet exporters decreased their FOB price offers by $5/mt during the 24th week.
As regards long products, the CIS export markets again remained quiet during the week ended June 17, as consumer reaction to the implementation of the Chinese export duties and therefore to the increase in prices has been slow in coming.
The Russian domestic longs market showed a stable trend during the week ended June 17. Although a price decreasing trend has been seen in the regions close to the main ports due to the competition from exports, these trends were of local character and did not affect the general levels.
Ukrainian domestic longs saw mixed trends during the 24th week. On the one hand, as a result of the producers' price increase, structural steel prices have risen in the domestic retail market by an average of UAH 75/mt ($15/mt). On the other hand, the oversupplied market for rebar has remained stable.
Flat rolled: CIS flats follow mixed trends
The CIS flats export market saw some mixed trends, depending on the region, during the week ended June 17. On the one hand, following the price increase of the Turkish flats producers, the Russian and Ukrainian exporters upped their flats prices for this market by $5-10/mt. On the other hand, the approaching holiday period in Europe and the resulting slowdown in activity there forced the CIS exporters to decrease their price for this market.
The Russian and Ukrainian domestic flats markets were stable during the 24th week, showing no major changes in prices.