Due to the recent holidays both in Europe and in the CIS, the flats market has been in a calm state since last week. However, the expectations of end-users with respect to the new prices to be announced, in addition to the reaction expected from the CIS producers to the new prices issued by the Egyptian mills, should bring some kind of activity to the flat rolled market.
Ukrainian steelmaker Ilyich production hot rolled coils were being offered at $570-575/mt CFR Turkey for late June shipments. The end-users decreased their buying offers to a range of $555-560/mt CFR Turkey by not concluding any purchases, preferring to stay on hold. However, these levels were not accepted by the sellers. The fact that Ilyich announced its ex-works price at $540/mt FOB for last month, combined with the increase in freight rates, made it impossible for sales to be concluded at a level of $555-560/mt CFR Turkey. The end-users are anxious to lower this price range further; however, whether they will succeed in their aim or not will be made clear with the new prices to be announced this month by Ilyich.
Russian steelmaker MMK was offering hot rolled coils at $660/mt CFR Turkey for June shipments. However, MMK production hot rolled coils were sold to Turkey at $630-635/mt CFR. The offers to be announced this month by the producer for shipments to Turkey are expected to be slightly lower than the offers of last month. It seems that the fact the materials produced by MMK were sold in huge amounts last month will have an impact on the quotas allocated for this month.
Hot rolled coils ex-Kremikovtzi mill of Bulgaria were being offered at $605-610/mt CFR Turkey for June shipments; however, the offer levels retreated to a range of $590-595/mt CFR Turkey early this week. The new prices to be announced by the Russian mills will influence Kremikovtzi's next move.
Steel prices in the Egyptian domestic market increased over the past week. Hot rolled coil prices from EZDK increased by EGP 255/mt (around $45/mt), while the other Egyptian mill Hadisolb is also expected to follow shortly. In the meantime, export offers from EZDK are given in the range of $660-670/mt FOB, while offers by Hadisolb are around $600/mt FOB.
The rise in the Egyptian market is of great importance since it raises the question of whether the rise in this market will have an effect on the new prices to be announced by the Russian and Ukrainian mills. The fact that end-users expect an overall decline in the prices has developed into a weird situation with the rise in prices announced by the Egyptian mills. We'll soon see whether the CIS mills will arrange their prices by taking advantage of this situation.