During the 32nd week of 2007, most of the CIS export markets saw some activity as regards both sales and price changes. In the scrap market, the rising freight rates, along with the increase in domestic scrap purchases by both Russian and Ukrainian steel producers, ensured continued scarcity of scrap for export and also price rises for the material. Meanwhile, due to the ongoing price rise in CIS origin billet offers, longs of the same origin started to show stronger signs of rebound. However, the CIS flats export markets stood still, and are expected to continue this trend till the end of the current month. On the other hand, the Russian and Ukrainian domestic markets saw diverse tendencies as regards different product groups. Whereas scrap has shown a minor upward trend in both the Russian and Ukrainian markets, longs in these countries have dropped slightly. As for flats, in both the CIS markets in question, flat steel showed decreases for the various products.
Scrap: Increasing freight rates dominate CIS origin scrap prices
Continuous disturbance as regards freight rates in the Black Sea region scrap market was still the predominating factor in determining the price rising trend for A3 grade scrap during the 32nd week. In addition, the increased domestic scrap purchases in Russia and Ukraine resulted in lesser volumes of scrap for export. Thus, in the week in question A3 grade scrap prices rose by yet another $5/mt.
The Russian domestic scrap market, which had been nervously stable since the beginning of July, began to show some signs of a price rising trend during the second week of August. Yet, since the increases were confined to these regions, they were not able to affect the overall A3 grade scrap price range, which stands unchanged since early July at Ruble 6,200-7,900/mt ($243-310/mt).
The Ukrainian domestic scrap market saw some changes in the week ended August 10. However, due to the considerable slowdown of export deliveries, the price fluctuation in the domestic market was only of a limited nature.
Long products: Rising trend in CIS export billet prices rubs off on longs as well
Billets offered by CIS producers continued to rise in the second week of August, fed by rebounding demand in the Middle East and increased offers from Turkey and other supplying countries. In the week ended August 8, CIS billet offers increased by $5-15/mt.
The increase in the global billet market provoked a broader activation of the CIS export longs markets in the 32nd week. Although a price rise in rebar and wire rod was not registered during the week in question, the current market conditions and the rise in billet prices have created the prospect of a significant price rise in the near future.
On the other hand, the Russian domestic longs market continued to decrease during the week ended August 8. Regardless of the recently initiated recovery of the international longs market, rebar and wire rod alike have followed a downward trend in the retail market. However, market players do not expect the market to stay in such a condition for much longer, and are predicting a new wave of price rises for September.
The Ukrainian domestic longs market saw a switch in direction as regards structural steel market development during the week ended August 8. Whereas during the previous weeks structural steel was on the rise in the Ukrainian retail market, last week prices entered a downward path, showing a UAH 5-25/mt ($1-5/mt) decrease depending on production specifications and delivery regions.
Flat rolled: CIS export markets are calm
Contrary to the developments in the CIS longs and scrap export markets, the CIS flats export markets were calm during the 32nd week. Although some separate tendencies were seen in plate markets, where prices continue to rise slowly despite the holiday season, the overall flats export market is not expected to revive before the end of August when the CIS producers are expected to come out with new and possibly increased prices.
The slowdown in the Russian domestic longs market continued to affect the domestic flats market in the second week of August. However, the decreasing trend appeared to be entering a slower phase. Thus, in the 32nd week in the Russian retail market the declining trend affected only CR products, which decreased by an average of Ruble 500/mt ($19/mt).
The Ukrainian domestic flats market, although now in slowdown, showed just minor decreases as regards HR steel. In addition, market players displayed some signs of increasing their buying activities in the market.