40th week CIS market review: strong domestic markets push export prices up

During the 40th week, the export markets started to show some activity regardless of the general lull caused by the month of Ramadan. However, the appearance of Turkish consumers in the scrap market had little impact on CIS-origin scrap sales, since their preferences were for US- and EU–origin scrap. As far as the CIS long and flat product markets are concerned, the strong Russian and Ukrainian markets pushed export prices up. However, it is highly unlikely that the levels offered by the CIS producers will find buyers soon. Scrap: Russian domestic market finally stabilized, Ukrainian – again on rise During the first week of October, the Black Sea scrap market was stable in terms of prices but slack in terms of purchasing activity. Although the Turkish consumers renewed their scrap purchases, their interest was directed towards US and Europe-origin scrap due to its lower price. As a result of the low purchasing activity levels during the 40th week, the price level for CIS-origin A3 grade scrap was carried over from the previous week. However, the market is expecting a softening in the CIS scrap export quotations during the 41st week. The scrap procurement price levels in the Russian and Ukrainian ports retained their previous levels during last week, with the only exception being the Russian Black Sea ports, where the procurement price level for A3 grade scrap rose by $5/mt in the course of the week. The price leveling, which characterized the Russian domestic market during the second half of September, has finally reached completion, bringing stability to the market during the week ended October 9. Last week, the procurement price for A3 grade scrap stabilized in the range of Ruble 5600-6100/mt($208-227) and is expected to stay at this level at least until the end of the month. In addition, the largest Russian steelmakers have announced that they have no intention to change their price levels due to the high level of scrap inventories. The Ukrainian domestic scrap market experienced a slight rise in domestic procurement scrap prices during the last week. The price level for A3 grade scrap, which was stable throughout the 39th week, rose by UAH30/mt ($6) in the course of the 40th week. Long products: export prices rise, domestic markets more stable During the 40th week, the CIS export markets were on the rise with an exception for billets, the price for which did not undergo revision, still hovering in the $410-420/mt FOB range. As regards rebar, the CIS producers continued to raise prices during the week on the back of the strong domestic markets, causing the other products in the group to follow a price race tendency. Thus, in the course of the week, the export quotations of rebar rose by on average $20/mt, both angle and channel bar rose by on average $10/mt, while beam added $10mt to its previous week's price. However, due to the reduced activity in the Middle East, the new levels are unlikely to be accepted by consumers there. During the first week of October, the rebar price continued its fall in the Russian domestic market, decreasing in the course of the week by Ruble 200/mt($7). However, channel bar and wire rod, which indicated a minor price decrease during the 39th week, showed a strong trend in the domestic market last week, increasing by Ruble200/mt($7) and Ruble150/mt($6) respectively. In the Ukrainian domestic market, the rebar price continued its strong rise in the first week of October, while the price changes for other long products were not that significant. In the course of the week, the rebar price rose by 2.5 percent, while the price changes in such products as beam, angle and channel bar were below one percent. However, the price hike introduced last week by the domestic producers may lead to the beginning of a new wave of increases starting from the current week. Flat rolled: stability continues to govern the markets During last week the CIS export markets for flat products were stable. Under the effect of the strong domestic market, the availability of Russian and Ukrainian products was low. As for prices, offer levels have not changed since the last adjustments announced by the producers for November deliveries. The Russian domestic market during the last week was governed by continued strong demand with minor fluctuations in prices in the flat product sector. Thus, HR and CR decreased by 0.93 percent and 0.8 percent during the first week of October, while galvanized steel retained its 39th week level. During the 40th week, the Ukrainian domestic market was stable in terms of flat products, showing no changes in price.