HRC producers in Russia continue their activities in the export markets, currently mainly offering for February shipments, while the activity in the domestic market remains subdued. The local HRC demand Russia is currently weak due to seasonal factors, and their influence on the construction activity is going to start fading only towards March. In addition, the market sentiment and the level of end user demand is still affected by the high interest rates, which creates financial trouble for the traders and end-users, therefore weighing in the general business environment.
Russian mills continue their export activities in the global HRC market, mainly focusing on cooperation with the buyers from MENA. One of the sanctioned mills traded around 40,000 mt of HRC to the mentioned region at $470-475/mt CFR for February shipments and is aiming to increase the sales targets to $480-485/mt CFR for the remaining February volumes and for early March shipments. Another sanctioned mill from Russia, according to sources is at $475-480/mt CFR for January shipments to Middle East and specifically to Egypt, SteelOrbis has learned. As a result, currently, the sanctioned HRC from Russia is available on exports at $440-445/mt FOB Black Sea and $425-440/mt FOB Baltic region.
The non-sanctioned Russian HRC producer, according to sources, remains focused predominantly on sales to the Turkish markets, having achieved in this round for February shipment sales the level of $485-495/mt CFR. Taking into account around $25/mt freight, the latest FOB Black Sea level for this supplier is evaluated at $465-470/mt.
In the local market, the mills’ HRC offers for the current month of production are still at RUB 57,000-58,000/mt or around $600-610/mt CPT according to $1 = RUB 79. The 8 mm HRS offers from the producers’ side have remained at RUB 52,000-53,000/mt CPT or around $550-560/mt CPT. The ex-warehouse HRS prices have been reported at RUB 54,000/mt or $570/mt, but those are expected to rise by at least RUB 1,000/mt ($10/mt) in January after the increase of the VAT from 20 to 22 percent. The local sources reported there has been a slight increase of purchases from end-user side before the VAT increase, but it was not strong enough to have a critical impact on the market. Overall, the domestic business activity for flats is not expected to improve until March.