During the 30th week of 2007, the CIS market saw some changes as regards the billet and longs production groups. Due to the stock reductions experienced for these products, the export markets showed interest in purchasing CIS-origin goods. The revival of the export markets affected the CIS longs market, where prices stopped falling. Meanwhile, the Russian domestic longs market, being oversaturated by imports, continued to show price decreasing tendencies. On the other hand, both CIS export and domestic flats markets found themselves on a stable trend last week. Meanwhile, the CIS domestic scrap markets are awaiting the next moves from the export markets.
Scrap: Domestic markets wait for exporters to make a move
The Black Sea region scrap market was characterized by moderate levels of activity as regards A3 grade scrap purchases during the 30th week. However, due to the increased freight rates (yet another freight rise was recorded during the week in question) and the resulting rise in prices of CIS-origin scrap in the Turkish market, many consumers continued to abstain from active purchases, buying only the necessary volumes. Meanwhile FOB Black Sea A3 scrap prices retained their previous levels. However, due to the revival observed in the longs and billet markets, the main consumers of A3 grade scrap will not be able to postpone the inevitable price rise for long, and so A3 grade scrap (on FOB basis) is expected to rise in the weeks ahead.
The Russian domestic scrap market did not see many changes during the week ended July 29. As the level of scrap collection sees its seasonal increase, Russian domestic scrap consumers have no reasons to up their procurement scrap prices against the continuing low level of export deliveries.
The Ukrainian domestic scrap market was also calm during the week in question. As in Russia, the Ukrainian domestic steelmakers are waiting for the export markets to move first in order to act accordingly.
Long products: CIS export longs market follows upward trend in billet
A slight revival of demand for longs and billets in the Middle East market allowed the CIS billet exporters to raise their prices by $10-15/mt during the 30th week. In addition, these increased prices seem to have been accepted by the consumers, since there is almost no alternative to the Russian and Ukrainian billets due to the temporary absence of Chinese exporters from the market.
Following renewed activity in the billet market, the Middle East market for longs showed some signs of regeneration during the week ended July 29. Due to the reduction in the region's longs stocks, consumers began to enter the market.
Heavy imports continued to affect prices for longs in the Russian domestic longs market during the week in question. Last week, rebar in the retail market was offered at Ruble 230-300/mt ($9-12/mt) lower. In addition, the four-to-six percent decrease announced by domestic producers for August shipments has created expectations for a further decrease in the retail market. Meanwhile, wire rod in the Russian retail market managed to preserve its level during the course of the week.
The Ukrainian domestic longs market saw a halt to the rebar price fall in the week ended July 29. Although demand in the market for this long product is relatively low, the activation of export sales in addition to the unchanged policies of the domestic rebar producers for August shipment prevent the retail rebar market from falling further. On the other hand, structural steel continued to rise in price over the week in question on the back of scarce demand in the market. Thus, beam increased by UAH 45/mt ($9/mt), angle went up by UAH 25/mt ($5/mt) and channel bar rose by UAH 12/mt ($2.5/mt).
Flat rolled: CIS flats market characterized by stability
After the price increase implemented by several CIS exporters for the Middle East market during the 29th week, the CIS export market returned to its trend of stability during the 30th week. Meanwhile, plates, which had seen no change during the 29th week, started the week ended July 29 with a slight price rise.
The Russian domestic flats market continued to be governed by a price decreasing trend during the 30th week. Thus, the retail price for HR went down by an average of Ruble 70-220/mt ($3-9/mt), while the prices for galvanized steel, which had remained stable for a long time, decreased by Ruble 50-150/mt ($2-6/mt). The price for CR in the Russian retail market retained its previous level.
The Ukrainian domestic flats market saw a downward trend in regard to all flat products during the week ended July 29. Thus, the largest decrease in price was seen for galvanized steel (in the amount of UAH 15/mt ($3/mt). Meanwhile, the prices for HR and CR in the Ukrainian domestic market were reduced only slightly.