During the third week of 2007, all
CIS-origin products saw a positive correction in the export markets. The activity in
scrap purchases worldwide made it possible for
CIS scrap exporters to increase their prices, while the very active
Middle East and Gulf regional markets supported the continued price rise for
CIS-origin
longs and
flats.
Scrap: Black sea scrap market keeps climbing
The Black Sea region
scrap market was characterized by increased activity on the part of the Russian and Ukrainian
scrap exporters in the third week of the year. Although
scrap suppliers returned to the market in question during the second week, i.e., following the New Year holidays, it was only last week that their activities saw a full resumption. As for the price trend, the offers of
CIS-origin
scrap passed the mark of $300/mt CFR. The Turkish steel producers seemed to accept this level, mainly due to the fact that they could still compensate their rising
scrap expenditures at the expense of the end users of their products. Besides, due to the rise in
scrap prices in the other regional markets, the buyers of
CIS-origin
scrap in the Black Sea region have no leverage over the
CIS scrap suppliers.
The Russian domestic
scrap market continued its calm trend during the week ended January 21. Although some reports had been heard that the domestic steel mills were to increase their procurement
scrap prices last week, no actual changes were seen. Just like the end of December 2006, during the third week of 2007 the
scrap prices in the Russian domestic market stood in the range of Ruble 5,500-6,400/mt ($208-242).
The Ukrainian domestic
scrap market during the week ended January 21 did not experience much change compared to the week before. Although the market still showed some signs of uncertainty regarding the composition of
scrap prices, this confusion did not affect the actual price levels.
Long Products: Middle East market activities support CIS price increase
During the week ended January 21,
CIS-origin billets continued to rise in price, reaching $440-445/mt FOB Black Sea levels for the
Middle East. However, because of the highly active market, the consumers in the
Middle East seemed to accept the
CIS offer levels for billets. Besides, the
CIS-origin billets were not the most expensive ones in the concerned region during last week, since the Turkish suppliers were offering the same products at $40-45/mt higher. This situation gives
CIS billet exporters some room for maneuver.
As for long products, the
construction boom in the Gulf region was still the main reason for the continued long products price rise in the region during the third week. The large demand for
construction steel in the region made it possible for
CIS exporters to increase their
rebar offers by $10/mt and their
wire rod offers by $5/mt.
The Russian domestic
longs market saw some increase in activities during the course of last week. The unusually mild winter in
Russia this year has activated the demand for long products in the domestic market. Consequently, the price for
rebar and other
longs used in
construction showed some upward movements in the third week. In particular, a rise of two percent was seen for
rebar and an increase of 0.5 percent was seen for beam.
Regardless of the Ukrainian domestic traders' desire to keep up their prices, market prices continued to go down slowly during the third week. Thus,
rebar registered a decrease of UAH 10/mt ($2) during last week, while the channel bar price decreased UAH 10/mt($2).
Flat rolled: MMK CR absence in Turkish market creates opportunity for Ukrainian suppliers
During the third week of 2007, the
CIS flats export market experienced high demand for the products offered, therefore giving an opportunity to the Russian and Ukrainian producers to continue increasing their prices. This statement is especially true for the
Middle East and Gulf regions, where
CIS-origin HR saw a rise of $10/mt while CR prices reached $580/mt FOB Black Sea levels. The Ukrainian cold rolled producers saw a very favorable opportunity present itself in the Turkish market. Since
MMK's CR products are not being offered due to last November's accident, the Ukrainian CR producers were able to raise their prices substantially for the market in question.
The Russian domestic
flats market experienced some minor negative trends during the week ended January 21. Thus, CR decreased in price by on average 0.5 percent while HR dropped by on average 0.3 percent.
During the third week, negative price corrections started to be visible in the Ukrainian
flats market. In the course of the week in question, HR decreased by UAH 30/mt ($6), CR decreased by UAH 5/mt ($1), while
galvanized steel decreased by UAH 35/mt ($7) in the Ukrainian local market.