The first trading session at the new metals exchange in the Russian Urals-based city of Chelyabinsk held on Tuesday, March 29 resulted in the conclusion of two deals totaling a value of around Ruble 3.06 million ($107,340), with just 115 mt of the 1,500 mt of steel products offered for sale being sold, the Russian newspaper Kommersant has reported, adding that 18 companies, including MMK, Mechel, Evraz and NLMK, were accredited to participate in the trading.
Accordingly, 100 mt of rebar were purchased by traders from St. Petersburg at the price of Ruble 26,000/ mt (about $912/mt), while 15 mt of channels were purchased from Evraz by heavy machine building company Uralvagonzavod for Ruble 30,610/mt (about $1,074/mt).
According to Uralvagonzavod's marketing director Sergei Golygin, the prices of products purchased at the metals exchange were lower than market prices by about five to seven percent (the average market price of channels is Ruble 32,100-33,000/mt ($1,126-1,158/mt) including VAT). "It was a trial deal for us. The important thing is not the contract itself, but the expectation that the metals market will become easier to follow both for sellers and consumers," he said.
Experts consider that standardization of products is required for a full operation of the new metals exchange, while steelmakers are to be stimulated to take part in trading by the amendment to the law ‘On Protection of Competition,' according to which prices formed at the exchange cannot be considered to be monopolistically high, and, thus, they can avoid actions from antimonopoly bodies.
As SteelOrbis previously reported, the new metal exchange in the Urals is expected to bring more transparency to price-forming as regards Russian metals, and is expected to have a leveling effect on internal and export prices for domestic metal products. Along with ferrous metals, the new exchange will trade also non-ferrous metals.