Even though players have returned to the markets with the conclusion of the New Year and Orthodox Christmas holidays, for the time being purchases are only being made in order to supplement decreasing stocks, and European buyers mostly prefer to purchase the most reasonably priced material from the nearest market. Price inquiries have increased as compared to before the New Year holiday; however, these inquiries have yet to result in purchases in the eastern and southern European flats markets. Yet, once stock levels decrease, purchases are expected to increase.
Looking at the eastern European countries, in the Romanian domestic market import offers have not attracted attention on the back of the weakening of the local currency against the US dollar, by 18 percent, over the last two weeks, as well as due to the weak demand levels. Although activity is observed in the longs market, this activity has yet to be reflected in the flats market. Offers given to buyers in the local market have shown significant variation for identical material; the main reason for this is the high-priced materials being offered from stocks. Meanwhile, it is heard that Romanian producer Galati will further cut its production. HRC base prices in Romania have been standing at the level of €460/mt ($592/mt) ex works. With regard to the plate market in Romania, end-user demand has been on a slack trend. The machinery and shipbuilding sectors, which widely use plate, may be said to be feeling the effects of the global crisis and this has caused plate demand to drop. Ukrainian origin plate at the Romanian ports has been at the level of €520/mt ($669/mt) for 90-day deferred payment.
We discussed the situation in the Polish market in our analysis this week relating to that market. Summing up the situation, the Polish currency (zloty) has lost its value against the euro and this has led to a contraction of demand for import materials.
As for Bulgaria, Kremikovitzi has been offering materials to both the export and domestic markets against the background of the producer's difficulties as regards production. Since Kremikovitzi has cut its production significantly and market inventories have decreased consequently, market players in Bulgaria may start to purchase plate and sheet as of February. Kremikovitzi's export offers for HRC have been in the range of €350-360/mt ($450-463/mt) FOB Burgas, while the producer has been offering HRC to the local market at the level of €340/mt ($437/mt) ex-works. Also, Bulgarian mill Stomana has been offering plate to the local market at the level of €510-515/mt ($656-663/mt) ex-works, while for export this producer's offers have been in the range of €450-460/mt ($579-592/mt) FOB.
It is heard that traders have also been offering plates produced by Ukrainian mills Donetsk and Ilyich to Bulgaria. Their offers for Donetsk production plate have been at €395/mt ($508/mt), and at €465/mt ($599/mt) for Ilyich production plate - both on CFR Bulgaria basis. However, no bookings have been heard at these levels. For the time being, the Bulgarian plate market has been moving on a sluggish trend.
As we compare the price levels before and after the New Year holidays in southern European, we can say that prices have not shown any major change as compared to the eastern European countries. Flats demand maintains its slackness in the southern European markets. There are import offers to southern European countries and bookings are also heard; however, these bookings are not for large tonnages.
In Italy, base prices of local producer Ilva have not changed and are open to negotiation for purchasers with a real intention of buying. In the Italian domestic market HRC base prices have been in the range of €380-390/mt ($489-502/mt), while CRC base prices have been standing at €450/mt ($579/mt), with HDG base prices at €460/mt ($592/mt) - all exclude extras. In addition, sales prices of Egyptian and Russian origin hot rolled coils have been at €365-380/mt ($470-489/mt) CIF FO for 90-day deferred payment in Italy. Also, Ukrainian origin HRC offers in Italy have been in a price range of €330-340/mt ($425-436/mt) CFR Italy.
In Portugal, it can be said that the longs market is more buoyant than the flats market. Since end-user demand for flats has become sluggish, the sales performance of steel service centers has deteriorated. In the Portuguese flats domestic market, which has experienced a sharp fall with the conclusion of the New Year holiday, prices have this week almost remained unchanged as compared to last week. Only HRC offers given from Spain and Italy have decreased, by €10/mt ($13/mt), as compared to last week, and these offers are currently at the level of €370-390/mt ($476-502/mt) CFR Portugal.
The eastern and southern European flats markets are stagnant for the time being. The number of players who give offers and obtain price levels has increased as compared to the pre-New Year holiday period; however, this has yet to be reflected in increased conclusion of purchases. For the coming period, it is expected that purchasing activities will gain momentum according as stock levels decrease.
€1 = US$1.28683