CIS-based hot rolled coil (HRC) producers are getting ready to announce firm offers for July production and are evaluating the market situation carefully. All of them are aiming at higher prices in the new round, supported by stronger scrap prices and the positive situation in China. In addition, the allocation for July is expected to be limited, from Russia specifically.
In the Black Sea region, HRC suppliers from Russia, according to sources, are planning to open July sales next week with at least a $20/mt increase compared to the latest sales. The mills are expected to aim at $380-390/mt FOB for August-September shipments. One of the reasons is stronger scrap prices and increased HRC prices in Turkey, as well as the Asian markets being positive. Another reason is that mills expect a lower allocation for export for July production as the domestic market in Russia has started to revive after some restrictions have been eased, SteelOrbis has learned. “We might have very limited tonnage this time and we sure intend to not sell it cheap,” a producer said.
Ukraine’s Metinvest has been in the market with around $365/mt FOB for small coils and $370-375/mt FOB for big coils. In the previous round, the supplier’s lowest-priced deals were closed at around $350/mt FOB and $360-365/mt FOB, respectively. It is worth mentioning that a report of a sale from Metinvest to Asia at $418/mt CFR has been actively discussed in the market this week: however, it was not confirmed by the time of publication. Moreover, a good number of market players consider it to be hardly possible, SteelOrbis understands.
In the Baltic region, Severstal plans to announce new offers next week and most probably with a price increase. The producer’s June production sales were closed at around $400/mt FOB for northern Europe and at $360-370/mt FOB for southern Europe and the Middle East. Similar to the other two Russian mills, Severstal expects less volume to be available for July production for exports.