The fact that flats prices exceeded the level of $1,000/mt was in line with expectations; however, with offers rising above the level in question, buyers started to adopt a wait-and-see stance. A slowdown has been registered in flats bookings, in particular in the past two-to-three weeks. With the increases in offer levels given from Ukraine and Russia, offers from China have started to see greater acceptance.
In offers ex-Ukrainian mill Zaporizhstal for the United Arab Emirates, HRC stood at the level of $950/mt FOB, whereas CRC stood at $1,030/mt FOB. The Russian producers have gradually started to announce their new price offers; however, as their new increased offers will stand on average at around the level of around $1,100/mt FOB, it is estimated that the level in question will be deemed high for buyers in the Middle East. It is heard that traders in the United Arab Emirates have been concluding sales of Russian production HRC, for which they had previously taken positions. As the offer levels given from Russia and Ukraine are hovering at high levels, it is seen that buyers in the Middle East have switched their focus to the Far East. While ex-Chinese HRC bookings are concluded at the level of $970-990/mt CFR Dubai, there are bookings concluded in the range of $1,180-1,190/mt CFR for HRP. Furthermore, there are also bookings heard from Thailand and an increase is being registered in the availability for ex-Vietnamese offers.
The Syrian domestic market cannot currently be described as active. The latest offers ex- Zaporizhstal for Syria were at the level of $960/mt FOB; however, the levels in question have not gained acceptance from buyers. The sluggishness in the domestic market and financial problems are cited for the main reasons for the lack of acceptance.
A recovery is being observed in the Iranian domestic market with the commencement of the New Iranian Year. Especially, the rumors that the import duty on HRC will be reduced - which were also in circulation last October and have resurfaced in recent days - have given momentum to the market. It is known that the import duty is being demanded particularly by the Iranian pipe producers. There is a ten percent duty on flats imports currently in Iran and, especially, the rise in prices for Russian, Ukrainian and Chinese-origin materials seems to have boosted these rumors. When the same rumors were circulating last October, the Iranian Ministry of Industry rejected such a move. According to the current rumors, the import duty will drop to four percent from ten percent; however, the accuracy or truth of the rumors will be seen in time. A decrease has been observed in the export tonnage allocated by Mobarakeh for 2008. The latest bookings for Mobarakeh production HRC have been concluded at the level of $1,060/mt FOB. The prices for HRC in Iran have risen to $1,075/mt.
Price rises are also being registered in the export offers given from Egypt. In the latest offers given by EZDK, HRC of 1.2 mm thickness stood at the level of $1,230/mt FOB for August shipments. It is seen that the export tonnage allocated by the mill is limited due to the robust demand in the local market and that that the export prices are hovering at very high levels.
Taking into consideration the new levels to be announced by the Ukrainian and Russian mills, it is highly likely that the ex-Far East purchase volume will soar in the Middle East.