During the 49th week (Dec.3-9) of 2007, both CIS export markets and prices saw strengthening trends due to active purchases and also due to expectations of increasing production costs. On the other hand, both the Ukrainian and Russian domestic markets followed stable trends, with the only exception being a slight price rise in the Ukrainian HR segment.
Scrap: Ex-CIS scrap price continues to rise due to freight rates
During the 49th week of the year, the Black Sea region scrap market continued to show price rising trends as regards ex-CIS scrap. Just as during the previous week, the rising freight rates were responsible for a price increase in A3 grade scrap imports in the Turkish market. Nevertheless, active sales were observed in the market as well, since the recovery of the global billet and longs markets made it possible for producers to accept the rise in imported raw material prices. On the other hand, scrap exports in the direction of the Far East did not perform so well during the period in question. Due to the availability of cheaper scrap from Japan and the rising freight rates, scrap sales to Southeast Asia are becoming rather unprofitable.
During the 49th week, the CIS domestic scrap markets showed more or less stable trends, with slight movements seen in prices.Whereas several steel mills in the Russian domestic market slightly lowered their procurement scrap prices, in Ukraine an opposite trend was seen in respect to individual steel mills. Nevertheless, these price movements did not affect the general scrap price levels in either of the markets.
Longs: Ex-CIS billet and longs prices get hiked further
Purchase activities from customers in the Middle East and Gulf regions supported yet another increase in ex-CIS billet prices during the week ended December 9. Thus, during the week in question, the CIS exporters hiked their price offers to the regions in question by $10/mt, while it is widely expected that this is not their final offer level and that the prices for billets to the Middle East and Gulf will continue to rise further. On the other hand, the Southeast Asian market was overshadowed by the success of sales to the Middle East. Although the market remains strong, the prices in the Southeast Asian market are rather stable.
With success in upping billet prices for the Middle East and Mediterranean markets, and following the price increase performed by the Turkish producers for their longs exports, during the 49th week the CIS longs exporters hiked their prices further by $10/mt.
Meanwhile, the Russian and Ukrainian domestic longs markets only saw minor price movements during the week ended December 9, as the markets are entering their seasonal slowdown.
Flats: CIS flats exporters raise their prices due to expected raw material cost increase
The shadow of expected growth in the cost of raw materials in the New Year and of the continued rise in freight rates has started to be seen as the CIS flats exporters increased their prices by an average of $20/mt for the Turkish market during the 49th week. Although the current price rise affected only the market in Turkey, a price increase trend is expected to spread to the Middle Eastern and North African markets before the New Year.
Just like the Russian longs market, the Russian flats market stood still during the week ended December 9.
The Ukrainian domestic flats market, however, was governed by a mixed trend. On the one hand, CR stood in the same price range as in the previous week. On the other hand, the HR retail price increased by UAH 10/mt ($2/mt).