Local flats prices fall in Russia, exports become challenging

Flats producers in Russia have decreased their domestic prices, announcing offers for August production. Local demand is reported to be insufficient for now, probably as buyers expect some additional discounts to be granted, especially in view of the export duty which has been introduced.

The local hot rolled sheet (HRS) producers have decreased their offers by RUB 9,000-10,000/mt over the past month, which, also taking into account the currency fluctuations, has resulted in $145-157/mt drop in prices on US dollar basis. In the cold rolled sheet (CRS) segment, rice declines are RUB 10,000-19,000/mt and $163-266/mt, respectively. “Locally, flats are already overpriced and the decrease is normal, especially considering the export market situation,” a source told SteelOrbis. In addition, local pipe-makers in Russia are said to be sitting on sufficient stocks.

In the export segment, Baltic region-based Severstal has continued trading small lots of HRC to the northern part of the EU at $1,220-1,250/mt FOB base, but has been forced to cut its offers to southern Europe by $60/mt over the past week to $1,040/mt FOB. “Competition has intensified with offers coming from everywhere, and local HRC transaction prices in Europe have been weakening,” a source said.

On the Black Sea side, the latest offer from MMK to Turkey has been voiced at $950/mt CFR or around $920-925/mt FOB. However, buyers expect the supplier to provide some additional $10-15/mt discounts. NLMK, according to sources, is foreseen to aim at selling at $950/mt FOB and even above. “They might succeed at these levels since their allocation is limited as always and the quality is high and suitable for re-rolling,” a trader told SteelOrbis.

Local flats offers for August production, CPT

Local prices in RUB include 20 percent VAT, while prices in US dollars do not.

$1 = RUB 74.3