CIS-based hot-rolled coil (HRC) producers have started to voice export offers for June production, targeting levels in line with the latest bookings or slightly above those. However, the general expectation for the coming round is mostly pessimistic as sales options remain limited due to the impact of Covid-19 effect.
In the Black Sea region, ex-Russia MMK has started to voice $370/mt FOB for June-production big coils, by $10/mt up compared to the deals of two weeks ago, to Turkey specifically. NLMK has not yet announced firm offers for the new round: however, buyers expect the mill to start talks at $370-375/mt FOB. Ukraine’s Metinvest is also taking its time to evaluate the market situation and will most probably seek to work with each sales outlet separately, SteelOrbis understands. The producer’s latest deals to Turkey and North Africa for May production were closed at around $360/mt FOB for small coils, as reported earlier.
In the Baltic region, Russia’s Severstal has settled its HRC offers for June production at $370/mt FOB for southern Europe and the MENA region, in line with the latest deal levels. The offers for northern EU are at $410-420/mt FOB, again practically stable compared to the previous round of sales. The producer expects a certain improvement in sales to the northern part of Europe, while business with the south of the EU might take some time to revive.
Despite certain upward price moves taken by some ex-CIS HRC suppliers for June, buyers are mainly expecting deals to be hardly closed above $360/mt FOB, specifically in the Mediterranean region due to subdued end-user activities. Another concern is that the June allocation ex-MMK is expected to be close to 200,000 mt, which is a significant increase. The other two Russian mills are foreseen to be in the market with close to 300,000 mt altogether, again for June production. However, higher ex-MMK allocation may be at least partly compensated by Severstal being more concentrated on sales to Europe this time, paying less attention to the Turkish and Asian markets, SteelOrbis estimates. In addition, MMK is expected to remain active in HRC sales to Vietnam.
