Russian flat steel producers have returned after their long holiday and have restarted export sales for end-of-February and March shipments, achieving some price increases owing to the generally positive market globally and the lack of aggressive offers from China. Turkey and the MENA region are still the main target markets, where the lead times from Russia are an advantage and competition with China is less fierce. In the local Russian market, where producers are struggling with seasonally low demand and ongoing financial difficulties, prices for hot rolled materials have been increased mainly due to the higher VAT imposed in Russia from January 1.
According to sources, the non-sanctioned Russian HRC producer has managed to almost close its March shipment sales for export, with deals concluded to Turkey for around 30,000-35,000 mt. Most of the trade is reported to have been done within the $500-510/mt CFR range, with some higher and lower levels also heard depending on the buyer and the order size. The sales prices are evaluated at $470-480/mt FOB Black Sea, SteelOrbis understands. In addition, offers of sanctioned HRC have been reported in Turkey at $470-485/mt CFR, equal to around $440-455/mt FOB Black Sea and around $430-440/mt FOB Baltic. In the MENA region, most offers have been reported at $470-485/mt CFR depending on the supplier and the order breakdown. According to sources, around 30,000 mt have already been sold to the region at the upper end of the range for March shipment.
In the Russian domestic market, mills’ HRC and HRS prices have increased by RUB 1,000/mt or around $10/mt at an exchange rate of $1 = RUB 77.75. As a result, HRC is available at RUB 58,000-59,000/mt or around $610-620/mt CPT, while 8 mm HRS is at RUB 53,000-54,000/mt or $560-570/mt CPT. In the meantime, the ex-warehouse HRS price in the local Russian market is at around RUB 55,000-56,000/mt ($580-590/mt). “The retail market is working with minimal stock levels since it is financially challenging. That is why the [price] dynamics of the retail and mills’ markets are in line. If there is no demand, there is no purchasing, but once the demand appears the bookings will start since there are no buffer stocks,” a Russian market player told SteelOrbis. Currently, domestic demand is at low levels due to the weather conditions, but mainly due to slow construction activity amid high interest rates. “With the current interest rate [16 percent], not many are taking out a mortgage, and so there is not much new construction out there,” a source commented.
The local prices in RUB are given without 22 percent VAT.