SteelOrbis has been informed that ArcelorMittal's base prices for HRC in the Polish market for February production are currently standing at the level of €370/mt ($479/mt) ex-works, indicating a €20/mt decrease compared to last month. Meanwhile, it is possible to find February production HDG from the same producer at €490/mt ($634/mt) ex-works, down €70/mt month on month, and CRC prices at the level of €450/mt ($582/mt) under the same conditions, marking a drop of €30/mt compared to last month.
On the other hand, Slovakian origin CRC from U.S. Steel Kosice is being offered to Poland at €440/mt ($569/mt) DAF, indicating a €30/mt decrease compared to last month; Hungarian origin Dunafer production CRC is being offered to the same country at €430/mt ($556/mt) DAF, marking a €30/mt drop compared to last month; and Russian origin CRC is being offered to Poland at €360/mt ($466/mt) DAF, i.e. a decline of €40/mt month on month - all for February production. Furthermore, Russian origin 0.5 mm 100 gr/m² zinc coating HDG is being offered to Poland at €475/mt ($614/mt) DAF for February production, down €40/mt month on month. Meanwhile, Zapo production HRC is being offered to the same country at €320/mt ($414/mt) DAF and the same origin CRC is being offered at €365/mt ($472/mt) DAF. On the other hand, Ilyich production HRC is being offered to the same country at €295/mt ($382/mt) DAF, up €15/mt on last month's figure, and the same origin CRC is being offered to Poland at €380/mt ($492/mt) DAF, indicating a rise of €15/mt compared to last month - all for February production.
The import and local price levels in Poland have softened by an average of €40/mt ($52/mt) and €28/mt ($36/mt) respectively, as compared to late December. In the November-December period domestic price levels declined by average of €74/mt ($96/mt), while import material prices fell by an average of €76/mt ($98/mt). We can see that the price decreases have been smaller this month. In consideration of producers' production cuts and the cost pressure issues likely to be seen in the coming month, February prices are expected to show softer decreases or to move on a stable trend as compared to January. However, no improvement is expected in terms of demand in the first quarter.
Three months ago the euro/zloty exchange rate was at the level of 3.06, whereas it has exceeded the level of 4.30 as of January 21. In other words the zloty has lost 40 percent of its value in three months. The increased strength of the euro has meant that import materials are now at a greater disadvantage. However, Russian and Ukrainian origin materials have not been affected by this situation.
As an important indicator for the future direction of industrial production, the PMI (Purchaser Managers' Index) in Poland in December decreased to its lowest level since June 1998. The index had declined by 3.2 percent to 40.5 percent in November from October's 43.7 percent, and went on to decrease to 38.3 percent in December.
Order cancellations have increased in Poland due to weak end-user demand while, on the other hand, inventory levels in the country have remained at high levels. Additionally, the banks have not passed on the interest rate cuts announced by the Central Bank to the real sector. All these factors have made it difficult to manage the cash flow in the market, and market players have become anxious against the background of the increasingly frequent requests for delays of payment.