The Russian domestic flats market continues to trend upward as the major flat producers have announced a considerable increase in their domestic flat prices for March production.
Currently, Russian domestic HR prices in the retail market stand at Ruble 21,000/mt ($875/mt) FOT including VAT for Central regions, and at Ruble 22,100/mt ($920/mt) FOT including VAT for the Ural and Far East regions. Meanwhile, CR is quoted at Ruble 22,700/mt ($945/mt) FOT including VAT for Central regions, and at Ruble 24,800/mt ($1,033/mt) FOT including VAT for the Ural and Far East regions.
However, these prices are expected to rise further in the current month due to the price rise announced by domestic producers for March production. Severstal, Mechel and MMK have increased their domestic flats prices by six to nine percent depending on products and delivery region. Under the effect of these price increases, a five to six percent increase in the domestic market price level can be expected during March.
Meanwhile, Russian domestic plate producers have increased their domestic prices for March production by an even higher degree, by about seven to eight percent, due to shortage of supplies and rising demand especially from the shipbuilding and pipe producing industries.
The rise in domestic prices has also been accelerated by the upward trend in the international market where ex-Russian flat products have seen an increase of at least $100/mt during the last couple of weeks.
Currently, demand for flat products in Russian is high. On the back of the country's economic growth, a strengthening of demand for flats from the machine-building, automobile and shipbuilding industries is seen. Market players report that many flat producers have limited their export deliveries in order to satisfy domestic demand. In addition, the reduction in import deliveries from neighboring countries has also tightened the supply side of the market, provoking an additional price rise.