As the end of 2008 approaches, the European and Middle East flats markets are still characterized by inactivity, and for now everyone is focusing on the likely market developments after mid-January. In addition, developments in the financial and commodity markets will be followed closely.
Meanwhile, as the European and Middle East markets see continued stagnation, the price increases and fluctuations recently seen in the Chinese market should also be taken into consideration. In particular, over the last ten days there has been an increase observed in the prices in the Chinese domestic market. Against the background of the brisk demand in the local Chinese market, the lowest HRC offers heard this week are at the level of $480/mt FOB, while the lowest CRC offers are at $580/mt FOB.
Looking at the CIS markets, this week offers given for HRC are in the range of $360-395/mt FOB. From Ukraine to China, a sale was concluded for a large tonnage of HRC at the level of $370-380/mt CFR. As for the CIS plate markets, in particular the demand for shipbuilding plate is at low levels due to the stagnation also felt in the shipyards. There are bookings heard for commercial grade plate, even if they are fairly rare; however, the demand for shipbuilding plate is weaker. The most buoyant market for shipbuilding plate purchases is South Korea. On the other hand, for HRC offers from Ukraine to Turkey are in the range of $380-390/mt CFR, whereas offers from Russia to Turkey are standing at the level of $430-440/mt CFR. Ilyich's offers to Turkey for commercial grade plate are at $600/mt CFR Turkey, while for shipbuilding plate the mill is offering at the level of $625/mt CFR Turkey. The offer levels for plates and coils have shown decreases as compared to previous weeks.
The southern European market continues its calm trend. While there is no change observed in the base prices of the mills, the price levels of the materials at the stockists have indicated a certain softness. Although HRC prices in the Italian domestic market are at the level of €360-370/mt ($513-527/mt) loaded truck, the sales volume is at low levels in this market. The base prices of HRC are in the range of €390-400/mt ($556-570/mt), whereas the base prices of galvanized coils are at €460/mt ($657/mt). With regard to the Portugal domestic market, there is no change observed in terms of both demand and price levels, though a sale of electro-galvanized coil from Italy to Portugal has been realized at the level of €600/mt ($855/mt) CFR. Demand in the Greek market is also on a slack trend. This week, offers from Australia for HRC are at the level of €340/mt ($480/mt) CFR Greece.
A "wait-and-see" atmosphere dominates the Middle Eastern markets with the conclusion of the region's holiday period. Since China's domestic market is strong, offers from this country are at higher levels than the offers from the CIS countries. Nevertheless, currently buyers in the Middle East markets are in stand-by mode and their purchases are expected to take shape with the commencement of the New Year.