CIS mills raise their HRC export offers to test the market

Upon their return from the holiday steel producers in the CIS have started to test the export markets with slight price increases for February production hot rolled coil (HRC).
 
In particular, Ukrainian producers Ilyich and Zaporizhstal are offering HRC to the export markets at $25-30/mt higher as compared to the previous month. HRC offers from the CIS for Europe are standing at the level of $560-565/mt FOB. SteelOrbis has been informed that some orders for small volumes for this destination have already been confirmed.
 
In the meantime, Russian producer Magnitogorsk Iron and Steel Works (MMK) is also following the current upward price trend and is now offering February materials at $20-25/mt higher than January production prices. Thus, its offers of HRC for the Middle East are standing at the level of $580-590/mt FOB, while its offers for Europe are at $585-595/mt FOB.
 
Prices of iron ore and steel scrap constitute one of the main factors behind the current increases in steel prices. Besides, Asian producers' price hikes are also pushing the CIS suppliers to raise their offers. In particular, South Korea's POSCO is offering HRC at the level of $590-600/mt FOB, and the producer will likely increase its prices by $10-20/mt in the coming week, while HRC offers from China are already $20-30/mt higher compared with previous levels and are now standing at $600/mt FOB. An additional factor are the post-holiday restocking activities aimed at meeting minimum needs, though buyers are very cautious and are not in a hurry to buy materials at offered prices, but prefer to wait and see.