47th week CIS markets review: Russian scrap price hike may shake export levels

The renewal of the price increasing trend in the Russian domestic market along with the continuation of the price fall for CIS-origin flats were the main developments of the 47th week. The worsening of weather conditions both in the CIS domestic and export markets had created a situation where CIS domestic producers and exporters alike had to lower their prices to be able to sell. This trend, however, was not true for the Russian and Ukrainian domestic scrap markets during last week. Due to the continually worsening weather conditions the Russian and Ukrainian mills increased, rather than decreased, their procurement scrap prices over the course of last week. Scrap: renewal of price rise in domestic markets gives CIS exporters the upper hand in price bargaining During the 47th week, the Black Sea scrap market was slack in regard to purchases of CIS-origin scrap. Because Turkish-origin finished steel products continued to decrease in price, Turkish steel mills were reluctant to pay the relatively high price that Russian and Ukrainian exporters asked for scrap during last week. In addition, the renewal of the price rising trend in the Russian domestic scrap market during the week ended November 26, gave an upper hand to CIS scrap exporters in their price bargaining with external scrap consumers. In the Russian domestic scrap market in the 47th week, the situation of nervous stability was broken when many local steel mills carried out a procurement price hike for A3 scrap towards the end of the week - following the mid-week example of Severstal. The average price increase was around Ruble 50-200/mt ($2-8). Nevertheless, because the rise was within the existing range, the average price of A3 grade scrap changed only slightly, adding just Ruble 50/mt ($2) to its lowest level. During the week ended November 26, the Ukrainian domestic scrap market continued to show a price rising trend. However, the domestic scrap price increased at a lower rate last week as compared to the 46th week- by on average UAH 10/mt ($2). Long products: price decrease comes to the Ukrainian domestic market The global long products market continued its slack trend during the 47th week due to the worsening of weather conditions. Very low demand for longs in the Middle East and Gulf forced Russian and Ukrainian exporters to decrease their prices. During the week ended November 26, CIS-origin longs fell in price by on average $10-20/mt, depending on the product. Many market players predict that the downward trend of longs will continue in December. During the 47th week, the Russian domestic market showed both increase and decrease price trends regarding long products. On the one hand, rebar registered a new weekly decrease record, falling in price by on average five percent over the last week. On the other, angle rose in price by on average 1.18 percent in the Russian domestic market during the same period. Other longs showed only slight fluctuations during the week ended November 26. Longs prices started to drop in the Ukrainian domestic market during the 47th week. Rebar, angle and beam prices dropped by on average UAH 10/mt ($2) each in the domestic market. Although the channel bar price managed to preserve its level last week, it is expected to decline in the upcoming weeks. Flat rolled: CIS-origin HR and CR continue their downward trend The CIS flats continued their falling trend during the 47th week. Although Russian and Ukrainian exporters are still supplying their products to the US market at relatively high prices, the demand in the USA is slowing down. Therefore, CIS exporters had to decrease their prices in order to sell their products in other markets, such as the Middle East and Africa. In the course of last week, the CIS-origin HR price decreased by $5-10/mt while the CR price dropped by $10/mt. On the other hand, Russian and Ukrainian plate prices showed a strong trend during the week in question, increasing by $15/mt. The Russian domestic flats market registered a slight price decrease in regard to HR and CR during the 47th week. Galvanized steel, however, rose by on average 1.5 percent. The Ukrainian domestic flats market saw some changes regarding HR and galvanized steel during the 47th week. In the course of the week, prices of HR and galvanized steel decreased by UAH 10/mt and UAH 40/mt respectively. Meanwhile the price of CR retained its level.