Weak buyer activity has forced CIS producers of round billets to cut their prices. Quotations of Ukrainian and Russian billets for Ukrainian pipe producers have decreased by $20-40/mt over the past month. During the same period, export prices of round billets from the CIS have declined by $30-40/mt.
Offers of November production billet from Russian producer OEMK are being given to the Ukrainian market at $425-440/mt DAF, down by $20/mt from the levels for October production material ($445-460/mt DAF). Offers of round billet from Ukraine's Dneprovsky (Dzerzhinsky) to Ukrainian mills are being given at $410-420/mt ex-works, compared to $445-460/mt ex-works last month. Export quotations of round billets from the CIS are in the range of $400-410/mt FOB for material produced in November. Yet, market participants report continuing weak demand in the export markets and expect another decrease of about $20/mt in quotations next month.
In line with falling round billet prices, export offers of Ukrainian seamless pipes for November-December production have decreased by $30-60/mt compared with the prices for October production.
Export prices from Ukrainian mill Interpipe for November-December production hot-formed seamless pipes of 57-219 mm diameter, of 10, 20 steel grades, as per GOST 8731/8732, are varying in the range of $800-850/mt FOB, with 273-325mm diameter pipes in the range of $900-950/mt FOB Black Sea ports, depending on the destination. 2"-8" seamless pipes of grade B, as per ASTM A106/API 5L, are offered by the same producer at an average of $850-900/mt FOB, with 10"-12" sizes at $950-1,000/mt FOB.
Export offers of November production seamless pipes with diameter of 57-168 mm made from steel grade 10, 20 according to GOST 8731/8732 from Ukraine's Dnepropetrovsk Tube Works are at $760-780/mt FOB.
Offer prices of Russian seamless pipes have increased by $10-40/mt over the past month. Producers say that they have been forced to raise their export quotations due to the weakness of the US dollar against the Russian currency, despite the falling prices of round billets. An expected increase of around 10 percent in transportation costs in the first quarter next year is another factor behind the raising of export prices of seamless pipes.
The export offers of Russian seamless hot-formed pipes of 33.7-219.1 mm diameter, made to GOST, ex-Uraltrubostal (Pervouralsky Novotrubny Works) are at $750-790/mt FOB, for December-January output.
Export prices for seamless hot-formed pipes with diameter up to 425 mm of 10, 20 steel grade made to GOST 8731/8732 from Russian producer TMK's subsidiaries Taganrog Pipe Plant and Volzhsky Pipe Plant are at about $750-800/mt FOB.
TMK notes that soft demand in the export markets has cut deeply into pipemakers' profits, though the market could improve by mid-2010. TMK does not expect to see a significant recovery of demand before Q2 2010 due to high levels of inventories, depressed gas prices and liquidity problems.
The prices for January-February production hot-formed seamless pipes ex-Belarus SW (BMZ), of 21.3-168.3 mm diameter as per EN 10216-1 or GOST, are at about $1,000/mt FOB. Pipe production at this mill will remain suspended in November and December due to modernization work being carried out on equipment.