10th week CIS market review: Ex-CIS scrap and billet beat new records

During the 10th week of 2007, further price rises were seen in the CIS export market as regards scrap, semis, and long products. Although the CIS flats export markets had a quiet week, they are expected to see another increase in prices in the weeks ahead. As for the CIS domestic markets, scrap in both Russia and Ukraine seems to be repeating the trends of last summer, when steel producers were ’racing' for higher prices in order to ensure scrap deliveries. On the flats and longs front, an increasing trend was observed in the Ukrainian domestic market, while the Russian domestic prices for the products in question remained relatively stable. Scrap: Strong demand pushes both domestic and export prices up During the 10th week of the year, the Black Sea region scrap market continued to follow an upward trend regarding ex-CIS A3 scrap prices. Due to the strong domestic and export market trends, CIS scrap exporters were able to increase their prices by another $5/mt with considerable ease. On the other hand, as far as volumes available for export are concerned, due to the increase in domestic scrap deliveries, only limited volumes of scrap were offered. The Russian domestic scrap market was characterized by increasing price tendencies during the week ended March 11. It seemed as if the Russian steelmakers, under the effect of both the international scrap price rises and the domestic price hikes performed by various steel mills in the course of the ninth week, finally began to engage in a price race to attract scrap supplies. As a result, an increase of Ruble 100-600/mt ($4-23) was observed in the market during the 10th week, lifting the overall level of the domestic market price to Ruble 5,500-7,000/mt ($210-267). On the other hand, the price rise in the Ukrainian domestic scrap market slowed down during the week ended March 11. Although the procurement price for A3 scrap continued its upward trend, going up by UAH 10/mt ($2) during the week in question, this increase was relatively insignificant compared to the price rise which was observed during previous weeks. Long products: Export prices undergo yet another rise The strong demand for billets from the Middle East, North Africa as well as the Eastern European market, together with the price increase performed by some exporting countries, all contributed to yet another price hike in CIS-origin billets during the 10th week. As a result, ex-CIS billets were offered for export at $530-540/mt FOB Black Sea. As for the CIS long products export markets, due to the continuous increase in semis prices, the ex-CIS longs continued on their rising path during the 10th week after prices faced a sharp increase in the beginning of March for April production. The most noticeable increase in export prices was seen in structural steel, the price for which rose by $10-20/mt compared to the previous week. Although ex-CIS rebar and wire rod saw some upward movement, they did not show a uniform price increase as the rises varied depending on the region of delivery and the material offered. The Russian domestic longs market was in relatively stable state during the week ended March 11. Although some price fluctuations for rebar and wire rod were seen especially in the Ural/Far East regions of Russia, these minor changes constituted more of a leveling effect than a price correction. On the other hand, the Ukrainian domestic longs market continued its upward march during the 10th week, supported by shortages in the market. In the course of the week, rebar increased by UAH 20/mt($4), wire rod rose by on average UAH 40/mt ($8), while channel bar and angle went up in price by an average of UAH 60/mt ($12). Flat rolled: Markets wait for another price rise The CIS export flats market was in a state of expectation during last week, waiting for the announcement of the new price levels of the flats producers. The forecasted increase for spring prices seems to be coming true as some rumors have been heard in the market that the main CIS flats producers are to present new increased prices with limited volumes on offer. The Russian domestic flats market was governed by slight price corrections during the week ended March 11. As in the export markets, market players in the Russian domestic market are waiting for price announcements by the major producers before moving to adjust market levels inside the country accordingly. The Ukrainian domestic market continued to follow its upward trend during the 10th week as well. As for the domestic flats market, the limited offers of producers are pushing the retail prices up. Thus, in the course of the week, HR increased by UAH 25/mt ($5), while CR saw an increase of UAH 30/mt ($6).