43rd week CIS markets review: new tendencies seen in second half of October

During the 43rd week, CIS exporters started to show some signs of activity after the end of Ramadan. While consumers began to show some interest in CIS-origin products, the asked-prices caused them to hold back their purchases. The domestic markets for flat rolled and long products registered different tendencies during last week. On the one hand, the Ukrainian market was governed by a positive trend in regard to domestic prices, while the Russian market experienced price decreases for the majority of products. As for scrap, the domestic scrap prices were stable during the 43rd week. Yet, this gained stability may easily be broken in the near future. Scrap: domestic markets - respite or stability? The situation in the Russian domestic market during the 43rd week was characterized by relative stability. Following the small increase in the domestic procurement prices for A3 scrap during the 42nd week, prices stabilized in the course of last week. Due to the near completion of scrap inventory building by the majority of Russian steelmakers, the price in the domestic market is expected to follow a stable trend. Yet, the situation in the domestic market will in many respects depend on the development of the export markets. The Ukrainian domestic scrap market which had entered a stable phase during the 42nd week retained its stability during the week ended October 30. The domestic scrap prices, which had been rising every week by about UAH 30/mt during October, have stabilized at the levels of the 41st week. Long products: will imposition of export tariffs by China favor CIS exporters? The export tariffs announced by the Chinese government for semi-finished products at the end of last week take effect from November 1, and so did not affect the market last week. The prices for CIS-origin billet preserved their previous levels during the 43rd week. However, the market players believe that the Chinese export tariffs will have a positive effect on Russian and Ukrainian billet exports in the future, making their prices more competitive. As for the other long products, the CIS export markets were stable during the week ended October 30, although a partial reactivation of purchases was seen post-Ramadan in the Middle East. In the Russian domestic market the construction season has almost come to its end. Consequently, the long products market prices continued to decrease during the 43rd week in Russia. In the course of the week, rebar price decreased by 4 percent while beam and channel bar were reduced in price by on average 0.7 percent each. Interestingly enough, regardless of the declining demand and market prices, Russian domestic producers continued to raise their prices for long products. The Ukraine domestic market, on the other hand, was governed by a price rising trend for long products during the week ended October 30. The most noticeable increase was seen in channel bar – up 1.7 percent, while rebar and angle increased by on average one percent in the Ukrainian domestic market. Flat rolled: export market regains stability During the 43rd week, stability returned to the CIS export markets. After the $10/mt decrease for CIS-origin HR in the 41st week and the average $15/mt decrease for CR during the 42nd week, during the week ended October 30 the market did not undergo any further significant changes. On the other hand, the Russian domestic flat rolled market experienced a 2.5 percent decrease in the prices for HR during the week ended October 30, while CR prices retained their previous levels. The Ukraine domestic flat market was governed by a slight price rising trend during the 43rd week. The domestic prices for HR and CR increased by on average 0.5 percent and 0.6 percent respectively in the course of the week.