CIS-based hot-rolled coil (HRC) suppliers have been forced to decrease their prices to key sales outlets, under pressure from low end-user demand and the overall pessimistic mood in the market. Still, even considering the price decline and the export duty effective in Russia, producers’ margins are estimated to be at rather high levels.
In the Baltic region, Severstal has announced its HRC offers for October at $1,070-1,100/mt FOB for the northern part of the EU and at $920-1,000/mt FOB for southern Europe. Offers for other regions, including Turkey and MENA, are at $880-900/mt FOB. The lower end of the ranges refers to the price for small coils, while the higher end is for big coils. Overall, the supplier has decreased its prices by $10-50/mt depending on the sales destination. The key reason is the long period of limited demand in the EU due to the holiday season, SteelOrbis understands.
On the Black Sea side, Russia’s MMK has stepped down from the earlier offered $950/mt CFR to Turkey and is now in negotiations at around $910/mt CFR. No sales have been reported yet, while some buyers believe $10/mt discounts may be applicable. Ukraine’s Metinvest has decreased its prices by around $15/mt over the past week to $905-920/mt CFR Turkey depending on the coil weight and has managed to sell 10,000 mt at the lower end of the range. The current freight rates to Turkey are estimated at around $25-30/mt, and so ex-CIS Black Sea-based HRC prices are now estimated at $880-890/mt FOB, with the potential to decline further. It is worth mentioning that Russia’s NLMK, according to the buyers, is not yet in the market with October volumes, but the mill is expected to target around $890-900/mt FOB for its traditionally limited allocation.
