During the 46th week of 2007 (Nov.12-18), the most noteworthy change was observed in the CIS billet market where Russian and Ukrainian exporters managed to increase their prices slightly. Meanwhile, the attempt by CIS longs producers to achieve a similar rise was largely ignored by the market. On the other hand, the CIS flats export market underwent a price leveling phase during which several CIS flats producers adjusted their new prices according to market conditions. The Black Sea region scrap market showed a continuation of active purchases but only toward the end of the week in question
With regard to the CIS domestic markets, the Russian and Ukrainian longs retail markets continued to see stable trends during the week ended November 18. On the other hand, while the Russian scrap market was calm, showing no price fluctuation, Ukrainian scrap prices attempted to regain their lost levels. As for flat products, Russian flats continued to follow their downward trend whereas Ukrainian flats retail prices increased on the back of strengthening demand.
Scrap: Ukrainian domestic scrap prices rise to regain lost levels
During the 46th week of the year, the Black Sea region scrap market was relatively stable, with a strong level of purchases only seen toward the end of the week. The reason for this was the strong storm which prevented ships from setting out from the Russian and Ukrainian Black Sea ports. Meanwhile, during the period in question the price of A3 grade scrap remained at the levels of the previous week.
The Russian domestic scrap market continued to be stable during the week ended November 18, since most of the major domestic steelmakers have built up substantial levels of winter reserves.
On the other hand, prices in the Ukrainian domestic scrap market experienced a rise in spite of all expectations of a further price decrease. Thus, due to the lack of coordination between the steel producers in terms of scrap price policies, and also due to the increasing shortage of this raw material in the market, the price decrease performed by the domestic steelmakers was largely unsuccessful. Consequently, the domestic scrap price saw an increase of UAH 5-35/mt ($1-7/mt) during the week ended November 18.
Longs: CIS billet exporters succeed in upping their prices
During the week in question, the CIS billet exporters were able to slightly raise their billet export prices thanks to the price increases made by the Turkish exporters and the rising cost of raw materials. However, it is doubtful whether the Middle East and Gulf region markets will accept the new CIS prices. On the other hand, CIS billet exporters saw a relatively high level of sales to the Vietnamese and Iranian markets during the week ended November 18. Although offers to Vietnam have been at a level of $580/mt CIF, an increase of $5-10/mt is expected in the upcoming weeks due to the limited supplies from China which have caused a shortage of billet in the Vietnamese market.
Meanwhile, the CIS longs exporters were unable to replicate the success of the billet exporters on the issue of prices rises. Although a hike was announced during the week in question, it was largely ignored by consumers who instead offered even lower prices for CIS origin products.
During the 46th week, the Russian and Ukrainian longs markets saw stable trends as regards retail prices.
Flats: CIS flats producers level prices for the Turkish market
During the 46th week, several steel producers from the CIS announced new prices for the Turkish market, which indicated a decrease of $20-30/mt depending on producers and product specification. On the other hand, Russian producer Severstal increased its CR price by $5/mt for the Turkish market. These separate trends indicate a price leveling process in the market, which can be justified by the limited level of purchases.
On the other hand, the Russian domestic flats market saw another decrease in flats prices during the week ended November 18. Thus, the retail price for HR decreased by Ruble 90/mt ($4/mt), while CR declined by Ruble 75/mt ($3/mt) in the Russian retail market.
The Ukrainian market, however, showed a positive trend in both prices and demand for flat steel. As a result, during the week in question HR increased by UAH 10/mt ($2/mt) and CR rose by UAH 15/mt ($3/mt) in the Ukrainian domestic market.