Lower CIS supply affects flat rolled markets

The silence in the Turkish local markets for the last two-three weeks has become more chaotic with the price announcement of certain Russian mills this week. With the price increases of 5-7 percent announced by Severstal and 3-5 percent announced by MMK, leading Russian steelmakers, Turkish local market is still strong. The strong state of Russian and Ukrainian local markets causes a decline in volumes allocated for exports. Generally Russian and Ukrainian producers prefer US and Europe, which are still major buyers of products from these origins, for exports. It is thought that the US' import quota has not been filled yet and the country still continues its purchases in large amounts. Price increase of 10-12 percent announced by Russian mills for exports as compared to the previous months has caused uncertainty in Turkish local market. Certain Turkish mills were expected to direct their focus on Erdemir products following the announced prices; however, the stay of execution regarding Erdemir privatization announced this week may cause uncertainty in the market. Under these circumstances, recently announced prices by Russian steelmaker Severstal may affect price policies of Ukrainian mills. Bulgarian and Ukrainian mills are expected to announce their new prices in the next week. Following the announcement of these prices, Erdemir may hike its prices, too. Apart from this, cold rolled product market is not active as hot rolled product market. While, the price gap between hot rolled and cold materials keeps its previous levels ($80-120) in Europe, the gap in the Turkish market is still narrower at $60-80.