US imports of Russian HR expected to increase in Q3

The amount of Russian HR exports to the US is expected to rise, peaking in the third quarter of 2006. Because of an agreement with the US government, Russian producers are limited to sell only 850,000 metric tons of HR flat products per year and have to follow the floor prices in the US market. However, because the amount of Russian HR exports was relatively small (in a total of the first half of 2006, Russia utilized only 21 percent, supplying 179,000 metric tons, of its yearly HR quota), the amount of HR exports to the US are expected to rise in the third quarter. As far as the floor prices are concerned, it is not a big restriction for Russian HR exports, given the high US market price. For instance, the US domestic HR offers are ranging from $683 per metric ton to $705 per metric ton FOB mill. The highest priced Russian HR offer was at around $700 per metric ton for delivery to a US port.