The prices announced by the CIS mills indicate a softening as compared to the prices of last month. The decline in prices has been directly affected by the situation in the local CIS markets. Despite the overall decline in the flats markets, plates maintain their strong price trend.
The prices quoted in the market last week at the level of $550-555/mt CFR Turkey for July shipments of hot rolled coils ex-Ilyich mill of Ukraine have this week declined to a range of $545-550/mt CFR Turkey.
Russian steelmaker MMK is offering hot rolled coils at $600/mt CFR Turkey for July shipments. Moreover, it is observed that the offers for small coils are a bit lower than the $600/mt level.
The softening in the local Italian market continues with Iranian origin hot rolled coils at €495-505/mt FOT and the same material of Libyan origin at €490/mt FOT level. The softening trend initiated in the local Italian market last week seems to be continuing this week as well.
Bulgarian steel mill Kremikovtzi had been collecting bids in the range of $580-585/mt CIF FO Turkey for hot rolled coils to be shipped in July; however, especially after the price announcement by Erdemir, demand in the Turkish flats market has switched to Kremikovtzi material, causing the price of this producer to increase to a range of $590-595/mt CIF FO Turkey.
Looking at flat products, we see that the strongest products in this market are plates. Demand for plate is still strong in the US, the Far East, Europe and the CIS markets. As a result, plate prices are expected to maintain their strong trend.
The highlight of the Turkish flats market this week is the announcement jointly made by MMK and Atakas to build an iron and steel mill in the southern Turkish port city of Iskenderun. Investments in flats production are expected to continue in Turkey due to its geographical location and specific requirements.
The strong local markets in the CIS countries allow CIS mills to maintain their strong situation in the export markets. The CIS mills are also expected to keep their strength in the coming period. Taking into account the fact that current offers are given for July-August shipments, we may expect that the softening in prices will continue for a while. However, an upward trend may be seen in prices towards the end of the year.