Higher scrap and iron ore prices, as well as the still positive situation in China and the bullish mood in Turkey, have all created a favorable environment for the hot rolled coil (HRC) price uptrend globally and in the Mediterranean region in particular. As a result, CIS-based HRC exporters have been seeking to take advantage of the situation.
Russia’s MMK is considering returning to the market after a long break now that prices have increased significantly and margins may be acceptable. The supplier has not yet settled any solid offers and prefers to collect bids, specifically in Turkey. The level of $480/mt CFR or around $465/mt FOB seems to be achievable, while next week higher price targets may be set as Turkish mills also plan to pull up their local offers. It is worth mentioning that, according to the source familiar with the situation, the producer’s mill 2500 which was restarted in late July has been running according to schedule. As a result, MMK may give some export tonnage for September production in the coming weeks, SteelOrbis understands.
Severstal is almost sold out for September production HRC, having a somewhat lower allocation compared to the previous month. The producer is standing at $460/mt FOB Baltic Sea, up from $450-455/mt FOB earlier this week. For now, Severstal plans to focus on HRC sales to the EU, but in the slab segment the supplier is expected to have a somewhat larger allocation for October production and has been already offering the product to the export markets, including Turkey.
NLMK, the third Russian HRC exporter, seems to be out of the market for now, most probably as its allocation is limited and it is not eager to sell cheaply in a rising market. Turkish buyers expect offers to be at $490/mt CFR minimum, which corresponds to around $475/mt FOB.
Ukraine’s Metinvest seems to be the only CIS-based mill nowadays which has a solid allocation to offer, but for small coils only. Its latest prices for Turkey have been set at $480/mt CFR and to Egypt at $490/mt CFR, both coming to around $465/mt FOB, SteelOrbis estimates. However, there is a possibility that the producer will choose to increase slab sales volumes on account of its lower HRC allocation. The latest import slab prices in Turkey have been at $445-450/mt CFR and above for ex-CIS and Brazilian origins, as reported previously.