5th week CIS market review: Domestic markets see return to usual winter norms

During the fifth week of 2007 the export markets continued to stimulate CIS exporters as regards billets, longs and scrap. Meanwhile, the demand for most flat products started to show some signs of weakening. As for the domestic trends, the markets for finished steel products returned to their usual winter norms, while the scrap markets showed some interesting tendencies during the week in question. Scrap: Russian domestic market sees downward corrections The Black Sea region scrap market continued its strong trend during the week ended February 4. However, with the worsening of weather conditions in the region along with the renewal of active purchases in the CIS domestic markets, CIS suppliers are offering less and less scrap for export. On the other hand, the price for CIS-origin A3 grade scrap continued to increase during the fifth week, adding about $10/mt to its previous level. Interesting developments occurred in the Russian domestic scrap market during the fifth week of the current year. Against the background of an increase in purchase activities and the worsening of weather conditions, some major Russian steelmakers decreased their procurement prices for A3 scrap by Ruble 200-500/mt ($8-19). However, this price correction occurred in the existing price range of Ruble 5,500-6,400/mt ($208-242). The Ukrainian domestic scrap market resumed its rising trend of last year during the fifth week. Domestic steelmakers, who more or less determined the composition of scrap prices, hiked their procurement prices for A3 grade scrap by UAH10/mt ($2) during the week in question. Long products: Strong export markets stimulate CIS exporters The strong demand for CIS-origin billets in the Middle East and Gulf regions pushed their prices further up, by about $10/mt, during the fifth week. As for the long products markets, the week ended February 4 was governed by a strong trend as regards demand and prices for CIS-origin longs. Meanwhile, the Middle East and Gulf region remained the most attractive markets for longs suppliers. As for the price trend, an upward movement in the range of $10-15/mt was seen for CIS-origin wire rod during the week in question. Although the other longs prices more or less retained their levels during last week, a renewal of the upward trend for them is expected during the upcoming weeks. Many market players from the CIS expect longs prices to increase further in March. During the fifth week, the Russian domestic longs market saw a continuation of the decreasing trend which had started during the fourth week. The most noticeable change occurred in regard to the rebar price, which in the course of the week decreased by Ruble 250/mt ($9) in the Russian domestic market. In addition to this, beam and channel bar experienced some decreases in their prices. The Ukrainian domestic longs market showed some different trends during the week ended February 4. On the one hand, rebar registered a decline of UAH 5/mt ($1). On the other, channel bar and beam showed some positive corrections, to the tune of UAH 3/mt and UAH 10/mt ($2) respectively. Flat rolled: Export and domestic demands show some signs of decline The demand for CIS-origin flat rolled products started to lessen a bit during the fifth week. However, such a situation did not affect price levels. The only noticeable change during the week in question was experienced by CIS origin plates, the price for which has been increased. However, the new price levels have not yet gained the acceptance of importers. Flat rolled products continued their downward trends in the Russian domestic market during the week ended February 4. Whereas this decrease affected only HR and CR during the fourth week, last week's price corrections impacted on galvanized steel as well. Thus, HR decreased by on average Ruble 247/mt ($9), CR dropped by on average Ruble 350/mt ($13), while galvanized steel declined by Ruble 600/mt ($22). The Ukrainian domestic flat market was characterized by relative stability during the week ended February 4. Although some price corrections were made in the market, they were not significant enough to effect the overall market situation.