So far in 2009 there has been a definite increase in deal news in the southern European flats market compared to previous months. In November and December 2008, there had been activity due to purchase movements in China, with the movements in question causing the CIS flats producers to fill up their order books to a greater degree. In the early days of 2009, more purchase news from the Middle East (Saudi Arabia in particular) was heard. In the same period, Egypt sold flats material both to the Middle East and to Europe, and this country has been offering flats to its export markets for April production. It is observed that Far Eastern countries have been turning their direction to markets such as the CIS and Turkey due to the decrease in China's import activity. The Chinese New Year holidays are now over and it is a matter of some speculation whether this country will again start to make flats purchases. No new purchase activity in China is currently being heard; however, purchase news from other Far East countries is being heard at the present time.
Looking at the southern European flats markets in general, it seems that the market is more active compared to December 2008; however, end-user demand in this region is still quiet. The base prices of Riva have not shown any great change in the past week; the producer's hot rolled material prices are currently at €360-365/mt, whereas its cold rolled material is at €440-450/mt and HDG prices are at €460/mt - all prices are ex-works. There may be some deals at below the abovementioned price levels for large tonnages. However, it is heard that Riva has decreased its over-rolling material prices by €20/mt and is selling HRC at a price level of around €340/mt including extras. On the Italian import market side, it is heard that Egyptian and Turkish origin HRC is being offered at a price level of approximately €390/mt FOT for 60-90 day deferred payment.
Regarding Romania, some deal news concerning ArcelorMittal Galati is currently being heard. This producer's HRC base prices were at €470/mt at the very beginning of 2009. However, following a price decrease, the producer had concluded a flats deal to Turkey. The deal in question has been followed by HRC sales to the Romanian domestic market and to Europe, respectively at the price level of €350/mt including extras and at €330-340/mt CFR Europe. In spite of such HRC deals in Romania, the demand level for HDG is at fairly low levels in the Romanian domestic market. The same low end-user demand level can be observed for plate in this country.
It can be said that the flats market situation shows no difference in Bulgaria as compared to Romania. Also, there are hardly any price queries for imports in this country since some materials are still available in stocks. Certain companies have applied to buy Bulgarian flats producer Kremikovitzi in recent weeks; however, nothing is certain yet and the producer is continuing its production even at very small tonnages. For this reason, the producer is only offering already produced HRC at the price level of €340/mt FOB, compared with the previous range of €350-360/mt FOB. Plate demand in Bulgaria is currently at low levels, whereas the local plate price level of Bulgarian plate producer Stomana is at €500-510/mt ex-works.
Plate offers from different regions to southern Europe have been registering a high density recently. More plate offers from China have been heard in Europe in recent years, with the reason behind the good demand level from Europe being the attractive prices of the Chinese material. However, starting from November 2008, due to the strong local demand in China and due to the production cuts in the same country, Chinese export offers started to become less visible, and it looks likely that the Chinese offers to Europe will be replaced by Indian plate offers. For a number of reasons (size, quality and advantageous offers), it is observed that plate deals have been concluded by Indian producers to Europe. While Indonesian origin plate offers to Europe were at $630/mt CFR last week, it is heard that an Indian origin plate deal was concluded to Spain in the past week at the price level of €480/mt CFR.