CIS flat producers continue to hike prices

Rising prices are still observed in the flat rolled markets all over the world, with the general outlook being that the trend will continue until the summer months. Russian steelmaker Severstal is not in a situation to allocate material from its April production for export to Turkey for June delivery due to strong domestic market conditions. It is said that bids around $50/mt over the March price level are invited to check availability but without guarantee. Severstal's March production prices for Turkey were at $600/mt CFR for HRC and at $680/mt CFR for CRC. Russian steelmaker MMK is offering its hot rolled coils at around $700/mt CFR for shipment to western and eastern Europe. On the other hand, the same products are being offered at around $650/mt FOB Black Sea for shipment to the Middle East, Saudi Arabia and India. The prices for Turkey are expected to be announced next week. Following these price announcements in Russia, Ukrainian steelmakers are in turn expected to increase their prices, with the possibility that serious price hikes may be issued next week. One of the reasons for the significant increase in prices is that the local markets in the CIS region are very strong, with producers offering their products mostly to the local market. Following the rise in the prices of the CIS producers, prices in the local Turkish market are also expected to go up. However, the Turkish local market may not react to these increases as the southern European market reacted. The price hikes announced by the CIS producers after the price announcement made by Erdemir caused demand in the Turkish local market to shrink. The general expectation in the Turkish market is that Erdemir may hike their prices again in response to the global rise in prices. The increase in the southern European market, especially in Italy, continues. The market level of Iranian origin hot rolled coils is at €510-515/mt FOT in the Italian market. Likewise, there has been an increase in the Portuguese market compared to the previous week. The price levels are similar in the southern European market, with the exception of the Spanish market, where prices are reported to be Euro 5-10/mt lower. Some of the mills in North Africa have increased their prices this week. Libyan steelmaker LISCO production hot rolled coils are being offered at $585-595/mt FOB. Moreover, Egyptian steelmaker EZDK production hot rolled coils are being offered at $630-635/mt FOB. With regard to the upcoming period, the flats market is expected to continue its rising trend, with new increased prices to be announced by the CIS mills. In addition, taking into account the fact that the US will also start buying material from the CIS next month, we may say with confidence that the rising trend in the flat rolled markets will continue.