During the 41st week of 2007 (Oct. 8-14), the traditional export markets for CIS steel products - the Middle East and Gulf regions - were mostly calm due to the religious holiday (Ramadan) in these regions. On the other hand, the Southeast Asian market seemed very attractive to the CIS billet exporters. Meanwhile, during the period in question both the Russian and Ukrainian scrap markets stabilized, showing no price fluctuation tendencies. On the other hand, thanks to the Russian domestic producers' announcement of a second price decrease for current month deliveries, prices in both retail flats and (to a greater degree) longs saw considerable decreases. In addition, although the Ukrainian retail markets were stable during the 41st week, a price fall may be seen in the CR segment due to the revised prices for the domestic market issued by some major flats producers.
Scrap: Stability reigns in both domestic and export markets
Although several purchases for small scrap consignments were seen in the Black Sea region scrap market at the beginning of the 41st week of 2007 (Oct. 8-14), by the end of the week no activity was evident in the market, mainly due to the holiday period in Turkey. However, in general, the market was quiet overall with scrap buyers mostly abstaining from large purchases. Meanwhile, Russian and Ukrainian scrap suppliers continued to stick to their positions, offering A3 grade scrap at $345/mt CFR Turkey. On the other hand, Far East destinations for Russian scrap exports did not look so promising during the second week of October; increasing freight rates to this region has made Russian scrap offers unacceptable to the Taiwanese and South Korean markets, both of which were enjoying lower offers for US origin scrap.
Both the Russian and Ukrainian domestic scrap markets were calm during the week ended October 14. However, a new wave of price increases in both markets should be expected, given the worsening of weather conditions and, consequently, the gradual reduction of scrap collection volumes.
Longs: Southeast Asian market appears very attractive to CIS billet exporters
While the traditional markets for CIS billets - the Persian Gulf and Middle East regions - were in a tranquil state because of the Ramadan holiday, the Southeast Asian market registered positive levels of consumption during the week ended October 14. Furthermore, ex-CIS origin billets in Iran also started to move up slowly during the week in question.
Meanwhile, CIS rebar and wire rod exporters, who had unsuccessfully tried to force a price increase at the end of last month, were having a hard time finding buyers during the 41st week even with the decreased price levels for their products.
The Russian domestic longs market dropped considerably during the week ended October 14, mainly due to the announcement of Russian producers and importers alike of their second decrease for the current month. As a result, retail prices for rebar dropped at once by a little less than Ruble 1,000/mt ($40/mt), while prices for wire rod decreased by about Ruble 150/mt ($6/mt). The price decrease trend in the Russian domestic longs retail market is expected to continue thanks to the continuous reduction of prices by producers and the approaching end of the construction season.
Meanwhile, due to the stable price policy of the Ukrainian longs producers, prices in the country's retail market continued their stable trend during the week ended October 14.
Flats: Against all expectations prices stay mainly unchanged
Contrary to the market expectations of a possible price increase for CIS flats exports, in the past week Russian flats producers announced mostly unchanged prices for the Turkish market. The only change occurred in Severstal's CR prices, which were lowered by $40/mt. Meanwhile, plate prices continued to increase in the direction of the Far East and even for Europe.
The Russian flats retail market experienced similar tendencies to those seen in the domestic longs market during the week ended October 14. As a result of the price decreases announced by producers, in the Russian retail market HR saw a drop of Ruble 150-300/mt ($6-12/mt) depending on the region, while CR registered a fall of Ruble 100-200/mt ($4-8/mt) depending on the region.
Meanwhile, the Ukrainian market may see some decrease in retail cold rolled steel prices pretty soon. This is because the increase which was announced by several major producers at the beginning of the month was reversed during the 41st week due to the market's reluctance to accept the prices.