39th week CIS market review: focus turns to domestic markets due to Ramadan lull in exports

During the 39th week, the general market slowdown which is a main characteristic of the Ramadan period finally affected the CIS export markets. Therefore, the main developments of the week were observed in the domestic CIS markets. The most noticeable trends were seen in the long products sector: whereas in Russia rebar prices continued the swift decline which commenced the previous week, prices in Ukraine sustained their upward trend. Scrap: prices show stability During the 39th week, the Black Sea region scrap market was governed by a stabilization trend in terms of CIS-origin A3 grade scrap prices. Due to the Muslim holy month of Ramadan, Turkish consumers, on the other hand, showed low activity in terms of purchases during the last week of September. The price leveling in the Russian domestic scrap market, which had started in the middle of September, continued last week, narrowing to the minimum the A3 scrap price gap between the Central Russian and the Ural regions. As for the Ukrainian domestic market, the upward trend in scrap procurement prices which had lasted almost a month leveled out and stabilized during the 39th week. Consequently, the procurement price for A3 grade scrap in the Ukrainian domestic market preserved its level of the previous week. Long products: price rise halted in exports and Russian market, Ukraine still on the up The CIS export markets for long products did not undergo any significant changes in the week ended October 2 as compared to the previous week. The general quietness in the Middle East and Persian Gulf markets due to Ramadan provided a situation in which the CIS-origin long product export quotations were carried over from the week before. Regardless of the upward trend which had started three weeks ago, the rise in CIS-origin long product prices was nevertheless halted during the 39th week – with Ramadan being a decisive factor. In the Russian domestic market, regardless of the price rise introduced for October deliveries by the main producers, long product price levels continued their downward trend during the last week of September. The approaching end of the construction season in Russia especially affected domestic rebar prices to a large extent. In the course of last week, the rebar price decreased by 3 percent in the Russian domestic market. In the Ukrainian domestic market, on the other hand, prices of long products continued to rise during last week under the influence of rising exports and domestic demand. Thus, the price of rebar rose by on average UAH130/mt($26), that of wire rod rose by on average UAH120/mt($24), channel bar by on average UAH 80/mt($16), while angle and beam increased by on average UAH 90/mt($18) in the course of the week ended October 2. Flat rolled: markets characterized by strength and stability During the 39th week, the CIS flat rolled producers consolidated their positions in the export markets. Due to the advantageous negotiations concluded in the 38th week, Russian and Ukrainian flats producers were able to push prices for their products up by $15-20/mt. In the Russian domestic market, HR prices remained stable, while galvanized steel and CR prices showed a 1.2 percent and 0.4 percent increase respectively during the 39th week. The Ukrainian domestic flat rolled market continued to show an upward trend in HR prices last week. In the course of the week ended October 2, the domestic prices for HR rose by on average UAH60/mt($12). Meanwhile, other products in the sector did not show much fluctuation.