50th week CIS markets review: flats are stable at last

Thursday, 21 December 2006 14:08:47 (GMT+3)   |  
       

During the 50th week, although for different reasons, almost all CIS-origin products experienced stability regarding their price levels in the export market, with the exception of billets. As far as the domestic markets are concerned, the approach of the New Year holiday in Russia and Ukraine caused a slowdown. As regards domestic prices, almost all steel products, with the exception of billet, were governed by a negative trend during the week ended December 18. Scrap: markets show relative inactivity The Black Sea region scrap market was relatively calm during the 50th week. After an increase in purchasing activity during the week ended December 11, Turkish scrap consumers did not conclude many purchases last week. The main reason for such inactivity was the equalization of deep sea and A3 grade scrap prices, and also reluctance on the part of the Turkish importers to pay the asked-for price. As regards scrap prices, due to the almost complete lack of market activity in the week ended December 18, no major changes were seen in the Turkish market. During the 50th week, the Russian domestic scrap market continued its stable trend. Although the domestic steel mills still continued to stock winter scrap reserves, market activity seemed to slow down due to the approaching New Year holiday. Consequently, prices did not see any major fluctuations in the course of last week. The Ukrainian domestic scrap market was also governed by stability during the 50th week. With the holiday period in the offing, the Ukrainian market saw a slowdown regarding scrap demand. However, a change in the prices is expected to be seen directly after the New Year holiday, due to the approval of a law late last week which cancels VAT on scrap operations within the country effective as of January 1, 2007. Yet, the experts can only speculate on the future direction of the scrap prices in the Ukrainian market. Long Products: export market sees some rise, while domestic negative trends continue During the 50th week, CIS-origin billet saw a $5/mt rise in its export prices after a considerably long period of decline. The CIS billet exporters, supported by the strong prices of Turkish-origin billets, increased their prices to the level of $410-420/mt FOB Black Sea. As for the other long products, CIS exporters were able to sustain their previous levels in the external market regardless of the fact that demand for construction steel was declining with the end of the year coming into sight. Longs continued their decrease in the Russian domestic market in the week ended December 18. As in the previous week, a relatively large drop was observed in the rebar price – on average 1.5 percent. Meanwhile, angle and channel bar decreased by on average 0.5 percent and one percent respectively in the course of the week. The Ukrainian domestic longs product market was governed by a negative trend during the 50th week. In particular, the channel bar price decreased by on average UAH 10/mt ($2), while beam prices decreased by on average UAH 5/mt ($1). Interestingly enough, rebar prices were stable throughout the week. Flat rolled: export markets see stability at last During the 50th week, the CIS flats export market was observed to be in a stable state. Although a small price rise was noted in the course of the week for both CIS-origin HR and CR, the overall situation had changed little since the 49th week. The Russian domestic flats market experienced mixed tendencies during the week ended December 18. On the one hand, both HR and galvanized prices showed a 0.5 percent decrease. On the other hand, the CR price rose by on average one percent during the 50th week in comparison to its level of the previous week. The Ukrainian domestic market continued to experience a negative trend during the 50th week. Thus, the CR price decreased by on average UAH 30/mt ($6), while the galvanized price saw a drop of UAH 15/mt ($3). The price of HR in the Ukrainian domestic market remained almost unchanged in the course of the week.

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