During the 43rd week of the year (October 22-28), the CIS exporters for almost all steel products switched their deliveries to the Southeast Asian and Iranian markets, which currently seem to be more advantageous compared to the sluggish markets in the Middle East and in the Gulf states. The only exception to this trend was scrap exports since the Southeast Asian market showed some signs of deterioration. Meanwhile, the Russian and Ukrainian domestic scrap markets were relatively calm during the week ended October 28, with the only disturbance seen in the Russian domestic market due to several steel producers' announcements of reductions in their procurement prices. The Russian domestic longs and flats markets continued to indicate a slowdown, while the Ukrainian markets retained their relative stability.
Scrap: Black Sea A3 grade scrap price continues to rise due to freight rates
During the 43rd week, the CIS Black Sea scrap market saw yet another increase in the A3 grade scrap price due to rising freight rates from Russia and Ukraine. However, regardless of the increase, the market started to show some activity, with several purchases seen in the market. Meanwhile, the slowdown in Southeast Asian demand for scrap, in addition to the rising freight rates from Russia's Far East, negatively affected Russian scrap sales to this market.
The Russian domestic scrap market saw a relatively stable trend during the week ended October 28. Regardless of the announcement by several mills of a reduction in the A3 grade scrap procurement price (by an average of Ruble 50-100/mt ($2-4/mt), the general scrap price level changed little during the week in question.
After a considerable price jump during the 42nd week, the Ukrainian domestic scrap market slowed down a little during the 43rd week. Although, the price rise trend continued in the market, the weekly increase was not as large as during the previous week.
Longs: CIS exporters may soon disappear from Middle East and Gulf markets
During the 43rd week, sales to the Southeast Asian market and to Iran remained the most profitable for CIS billet exporters in absence of market activity from the Gulf and Middle East. Currently, there is a difference of about €30/mt between these two directions for CIS billet exports. In addition, a continuous reduction in billets exports from China allows us to make an optimistic forecast regarding the future of CIS billet exports to Southeast Asia and Iran.
The Russian and Ukrainian longs exporters may follow their billet colleagues and switch to exporting entirely to Southeast Asia and Iran, as the Gulf and Middle East markets have not shown any positive tendencies lately. Meanwhile, Turkish rebar exporters hiked their price offers for the UAE market, in order to cope with increasing raw material costs. Although the new price levels have not been accepted by the consumers in this market, the move may be of benefit to Ukrainian rebar exporters since they have kept their prices unchanged.
The Russian domestic longs market continued to show softening tendencies during the week ended October 28. In the week in question, rebar prices decreased further by Ruble 1,200/mt ($50/mt) in the Russian retail market, while the wire rod price retained its previous week's level. Meanwhile, due to the fact that supply still far exceeds demand in the Russian domestic market, no positive forecasts can be expected for November.
The Ukrainian domestic longs market was characterized by a stable trend during the 43rd week. However, although the price policies of the domestic longs producers are expected to be unchanged for November, a possible price decrease in imports quotations in the coming month could bring a new wave of price decreases to the market.
Flats: CIS export markets are stable
Following the price increase announcement made by the principal Turkish flats producer , Ukrainian flats exporters decreased their export prices for this market by $5/mt. On the other hand, other CIS flats export markets, such as Europe and the Middle East, continued to a show stable trend in both prices and purchases. As with the longs and billet export markets, the growing demand for flat products in Iran and the resulting price increases are attracting CIS exporters to this market.
The Russian domestic flats market continued to soften in terms of retail prices during the 43rd week. However, the price reduction was as not as large as that seen in the domestic longs market - only Ruble 30/mt ($1/mt) for HR and about Ruble 120/mt ($5/mt) for CR.
The Ukrainian domestic market retained its stability during the week ended October 28.