51st week CIS market review: CIS domestic markets close the year with price decreases

The approaching holiday period, which this year sees a merger between the periods of Christian and Muslim religious celebration, started to make its impact felt on both CIS export and domestic markets during the 51st week. The main developments of the week in question include the increase in freight rates, which brought about the rise in CIS-origin scrap, and also the decrease in Ukrainian flats export prices. As for the domestic markets, a slowdown was visible in all product categories, while prices continued their decrease, even at the end of the year, especially in domestic long products markets. Scrap: Freight rates pull CIS scrap prices up The Black Sea region scrap market continued its calm trend regarding A3 scrap purchases during the 51st week. The price levels of A3 grade scrap, on the other hand, saw an increase. Thus, during the week ended December 25, CIS-origin scrap was offered at $5-10/mt higher than during the week before. However, it should be noted, an increase in purchase activities on behalf of the Turkish steel market was not the main reason for the rise in scrap prices. Rather, the increase in freight tariffs, as well as the undersupply of CIS-origin scrap in the pre-holiday period, was responsible for the increase. Both the Russian and Ukrainian domestic scrap markets saw stability and calm during the 51st week. It seems that major activity in these scrap markets will be resumed only after the holiday period, which this year will end on January 10. Long Products: markets are ready for holidays The CIS long products export markets sustained their relative stability in the course of the week ended December 25. Thanks to the Turkish longs exporters, whose prices in the Middle East and Gulf region were relatively high, CIS exporters were able to preserve their prices regardless of the tough competition from Chinese-origin long products. In general, the approaching holiday period, which this year merges both Christian and Muslim religious holidays, already seemed to have had a calming effect on the market activities during the 51st week. The Russian domestic long products showed some diverse tendencies during the 51st week. On the one hand, rebar prices, which continued to decrease, recording a four percent drop during the week concerned, started to approach the price levels of early summer 2006. On the other hand, longs such as beam and channel bar increased by on average 0.5 and 0.2 percent respectively. The Russian domestic producers, on their part, announced a relatively large price decrease for January 2007 deliveries for their long products. This decease especially affected rebar of 10mm and 12mm, which were lowered in price by an average of 10 percent. During the 51st week, longs continued to decrease in the Ukrainian domestic market. In the course of the week concerned, rebar prices decreased by on average UAH 15/mt ($3), beam prices fell by on average UAH 20/mt ($4), while the channel bar price dropped on average UAH15/mt ($3/mt), compared to the week before. Flat Rolled: full stocks in USA and EU force Ukrainian prices down After a relatively stable 50th week, which had even seen some positive tendencies, the CIS-origin flat rolled products registered some negative tendencies during the 51st week. Interestingly enough, whereas Russian-origin flat products were stable, Ukrainian flats showed some negative trends. Thus, during the week in question, Ukrainian-origin CR decreased by on average $15-20/mt while HR of the same origin decreased by on average $10/mt. The general downward trend in the US and European markets, which affected both the domestic and import flats markets of these economic blocs, might be responsible for the decrease in the Ukrainian-origin flat products. The Russian domestic flats market was governed by a mixed trend during the 51st week. Thus, the galvanized steel price registered a four percent increase over a week, while both CR and HR prices showed some minor negative corrections. The Ukrainian domestic flats market was governed by a negative trend during the 51st week. The price for CR decreased by on average UAH 20/mt ($4), that for HR dropped by an average of UAH 15/mt ($3), while galvanized steel prices registered a fall of UAH 15-25/mt ($3-5).