During the second week of 2008 (January 7-13), CIS exporters returned to the market after the New Year and Orthodox Christmas holidays with new increased prices. Due to limited offers and high demand for all types of steel and scrap at the moment, the prices of CIS origin products are expected to continue rising.
The Russian domestic scrap market saw a positive correction in prices, while its Ukrainian counterpart stood unchanged, during the week ended January 13. As for the CIS domestic longs market, both countries saw an upward trend in their retail markets. Meanwhile, both the Russian and Ukrainian domestic flats markets saw mixed trends, depending on the various products.
Scrap: CIS scrap exporters meet New Year with new prices
The CIS scrap suppliers returned to the Black Sea region market following the New Year and Orthodox Christmas holidays with new increased prices. The reason for the sharp increase during the holiday period was the reduced number of offers for scrap on the one hand, and the increasing demand for this raw material from Turkish steel producers on the other hand. As a result, the CIS scrap exporters were able to hike their scrap price by at least $30/mt from the end of December. As for supplies, not many offers were given for A3 grade scrap during the second week of the year due to the bad weather conditions and the resulting decline in shipments from Russian and Ukrainian Black Sea ports. In the Far East market, scrap offer price levels also saw a rise after the New Year holiday. Yet the price rise in this direction was not as considerable as in the Black Sea region.
The Russian domestic market during the first working week of the New Year experienced some price movement as well. Thus, several steel mills increased their procurement scrap price during the week ended January 13 by an average of Ruble 50-80/mt ($2-3/mt).
On the other hand, the Ukrainian domestic scrap market was rather calm during the second week of the year. As a result of the expiration of the amendment to the VAT-related law on January 1, 2008, according to which all scrap operations were exempted from VAT payments, confusion over the composition of the scrap price was created. As a consequence, the market price for scrap remained at the same level as at the end of last year.
Longs: Price rise continues in ex-CIS billet and longs markets
The consumption boom in the international billet and longs markets, which started in December of last year in the major steel markets, has continued in the New Year. In addition, with the implementation of the increase in Chinese export duties for semis, CIS origin billets have started to enjoy very high demand in the Middle East, North Africa and Persian Gulf. However, offers from the CIS were somewhat limited during the week ended January 13, since not all exporters from the region had returned to the market after the holidays. Consequently, offer prices have increased considerably since the end of December - approximately by $50-60/mt. Ex-CIS billet offer prices for Iran have also increased since the end of December. Although not many offers are currently being given for the Iranian market, traders expect the price to rise to $700/mt CIF in the first half of January.
The Russian domestic longs market also saw a certain rebound following the end of the holiday period. Although most of the Russian rebar and wire rod producers have not revised their domestic prices for January, the Russian retail market saw an increase of Ruble 150-200/mt ($6-8/mt) in the rebar price and a rise of Ruble 100/mt ($4/mt) in the wire rod price.
The Ukrainian domestic rebar market entered the New Year with an upward price movement for rebar, which was much more considerable than that seen in the Russian domestic market. Following the longs producers' price hike for January due to the activation of demand, local traders have increased their rebar price by UAH 60-80/mt ($12-16/mt).
Flats: Ex-CIS flats see considerable price hike
Ex-CIS flat products have also seen an increase in prices after the New Year holiday. The increasing cost of raw material and the rising freight rates, as well as the rebound in flats demand in the Middle East and North Africa, all affected the prices of CIS origin flat products. Thus, the new flats offer prices from the Russian and Ukrainian producers increased by $30-70/mt, depending on the product and the country of destination. Meanwhile, the expected revival of the European market may push up the prices of CIS origin products even higher.
The Russian domestic market was relatively calm during the week ended January 13. The only change in price was seen in the CR segment, where the CR retail price saw an increase of Ruble 80/mt ($3/mt).
The Ukrainian domestic flats market also experienced mixed trends during the second week of the year. Thus, due to the increase in domestic flat producers' prices and strong demand, the retail price for CR increased by UAH 80-120/mt ($16-24/mt). Meanwhile, prices for other flats retained a relative stability.