Russia has been quite actively present in the HRC export markets since around October last year with Turkey and the MENA region mainly targeted. However, starting from spring, the overall supply volume has declined and is expected to continue but in limited allocation. One reason is the seasonal revival of domestic flats market activity in Russia, although the spike of demand has not been so strong, according to market sources. In addition, at least one of the mills is going to have maintenance at one of its HR lines in addition to an ongoing blast furnace overhaul.
According to market sources and SteelOrbis’ findings, one of Russian mills is expected to keep its HRC export volumes at around 40,000-50,000 mt per month, while another has decreased the size of its allocation to 50,000-70,000 mt monthly, versus 100,000-120,000 mt earlier.
In the domestic market, current offers for HRC and HRS are at around $590/mt (RUB 62,000/mt) and $600/mt (RUB 63,000/mt), both on CPT basis. In the CR segment, coils are on offer at $760/mt (RUB 80,000/mt) and $775/mt (RUB 81,500/mt) CPT, SteelOrbis has learned. The prices have added around $5-10/mt (RUB 500-1,000/mt) over the past month due to slightly livelier domestic sales. Still, mills are citing rather high production costs, particularly in terms of labour and logistics. The issues with railroad transportation persist, while tariffs have remained high from December at $45-55/mt (RUB 5,000-6,000/mt incl. VAT).
Export sales prices have been fluctuating in a rather narrow range depending on the supplier, but the cautious targets to increase sales prices over the past month were not quite achieved. In particular, a sanctioned Russian exporter, which has been focusing on export sales to the MENA region, has closed the most recent deals for April production at $495/mt CFR, versus earlier deals at around $490-505/mt CFR. However, initially it intended to close most of the deals at $510-515/mt CFR.
Another Russian mill, which has not been sanctioned yet, has recently sold around 30,000 mt of HRC to Turkey at $500-505/mt CFR, in addition to earlier closed deals for a slightly lower volume at $510-515/mt CFR. Initially, the price indications for the current sales round were voiced mainly at $520-525/mt CFR Turkey.