41st week CIS market review: Strong domestic markets allow CIS producers export leeway, however not for long

During the 41st week, the still relatively strong domestic markets, maybe with an exception for the flat rolled market which was rather stable, allowed CIS producers to continue neglecting the export markets. However, the approaching winter and worsening weather conditions, primarily in Russia, will soon force CIS producers to reconsider their stance regarding exports, as the currently strong Russian market is due to enter a period of calm. The most noticeable changes last week occurred in the flat rolled sector with a decline in the price of CIS-origin products. Scrap: approaching winter may affect both domestic and export markets During the 41st week, the Ramadan-linked lull which governed the Black Sea region scrap market was broken as Turkish consumers' revived their purchases. As a consequence of the new interest in CIS-origin A3 grade scrap shown by Turkish steelmakers last week, its price rose slightly for Black sea port exports. The Russian domestic scrap market continued to follow its stabilization trend during last week. The leveling out of prices had ended during the 40th week and stabilization of procurement prices continued thereafter. However, although domestic procurement prices for A3 grade scrap were expected to preserve stability till the end of the current month, rapidly worsening weather conditions in Russia may bring positive correction to the scrap price earlier than the market had expected. The Ukrainian domestic scrap market last week continued to experience a slight rise in domestic procurement prices for A3 grade scrap. The price level for A3 scrap grade scrap, which had risen by UAH 30/mt ($6) during the 40th week, increased by the same amount during the week ended October 16. Long Products: still strong domestic markets preserve export prices During the 41st week, CIS long producers, due to still strong domestic markets, especially in Russia's case, were not looking to their traditional export markets, primarily the Middle East, for sales. As a consequence of the high activity level in the Russian domestic market, somewhat higher export offer levels for long products were heard from CIS producers in the course of the week. Yet these levels were not accepted by the buyers. Nevertheless, the approaching winter will not allow CIS producers to play with prices for long. As for the Russian domestic long product market, the demand continued to be very high, although it started to show some signs of weakening due to the worsening of weather conditions in Russia during last week. The slight worsening of domestic demand negatively affected the long product market during the 41st week. Thus, in the course of the week, rebar price decreased further by 0.5 percent, while angle price dropped by 0.7 percent. The only long product in the Russian domestic market which indicated a price rise last week was beam, the price of which increased by three percent due to its scarcity. The Ukrainian domestic long product market continued to be governed by a positive trend during the 41st week. In the course of the week ended October 16, rebar rose by UAH 20/mt ($4), channel bar increased by UAH10/mt ($2) while beam grew by UAH20/mt ($4). Flat rolled: new decrease in export quotations The stability governing the CIS flat product export market for the previous two weeks came to an end during the 41st week. Significant changes occurred in the price levels of CIS-origin HR, which were offered at levels $10/mt lower than the week before. The export quotations for plate and CR retained their 40th week levels. The 41st week concluded with almost no changes in the Russian domestic flat rolled market. The only exception was CR, the price of which rose in the course of the week by 0.7 percent, while other flats kept their previous levels. The Ukrainian domestic flat rolled market experienced an upward tendency in the price of galvanized steel during the 41st week. The domestic price of galvanized steel, which showed a stable trend after an increase in the 38th week, rose by UAH30/mt ($6) in the week ended October 2.