CIS-based hot rolled coil (HRC) producers are aiming for a sizeable price increase as they get ready to announce new offers for February production. Their somewhat limited allocation, coupled with sky-high prices in Turkey and the recent rise of the domestic offers in Europe are among the key reasons.
Russia’s allocation for February production HRC will be significantly limited. MMK, one of the key producers, being among the others overbooked for January, will be out of the market for now amid massive scheduled maintenance works at its small coil line. As a result, another Russian large supplier, NLMK, is aiming to reach as high as $460-470/mt FOB and above in its sales prices, with Turkey and Egypt being the key destinations. As a result, the producer’s targets for February are at least $40-50/mt above the latest indications for January production HRC.
Severstal, the third large HRC producer in Russia, has managed to reach $460/mt FOB Baltic Sea in its most recent sales to the north of Europe. Before that, its deals were sealed at $430-450/mt FOB, while its first contracts for January production were closed at as low as $415/mt, SteelOrbis has learned. It has been mentioned that some volume has been redirected by Severstal from exports to buyers in Russia and the CIS amid increased requirements. As a result, the producer is going to start offering for February production at nothing lower than $460/mt FOB, regardless of the destination.
Ukraine’s Metinvest is voicing $20-30/mt higher targets for February production or around $425-435/mt FOB, SteelOrbis has learned. The sufficient slab sales by the producer at high levels are among the reasons for its bullish policies in the HRC sector. In particular, the most recent slab sales to Turkey have been reported at $405/mt CFR, while the HRC price in the new round of sales is expected at not lower than $440/mt CFR.