Looking at the international flat rolled markets, we see that price increases have emerged as a result of different factors in the various regions, with strong demand observed to be exerting a strong influence.
An increase of Euro 10-15/mt, which we saw in the local Italian market during the December-January period, is likely to be seen again during the January-February period. It is also possible that a similar situation may be seen in the Spanish and Portuguese local markets. There is a general expectation of an increase for both the northern and southern European markets in the weeks ahead.
Taking into account the fact that increases in the international markets show their full effect on the local markets within 15-20 days, an additional hike in prices is also possible for the flat products in local markets - given the impact of the expected increases in the international markets in the coming period.
Looking at the
CIS market, we see that the local producers in the
CIS reduced their prices in early January, while traders did not reduce the prices of the products present in their stocks due to the high demand in the local
CIS market. The strong
CIS domestic demand was also responsible for the reduction in the exports of the
CIS producers, and consequently for the increase in export prices.
The hot rolled coil price of Ukrainian mill Ilyich, which was in a price range of $430-435/mt FOB in early January, is currently in the range of $455-460/mt FOB. This price level is expected to reach $475-480/mt FOB in the coming period.
On the other hand, the hot rolled coil price of Russian mill
MMK, which was in the range of $510-515/mt FOB in early January, increased to $520/mt FOB by the middle of the month. This price is also expected to increase by $10-15/mt in the coming period.
Looking at the supply-demand equilibrium, in the coming weeks demand is likely to see a continuation of the increase trend it has been experiencing since the beginning of the year. The strong demand, which emerged despite the capacity increases of major producers, is likely to cause an increase in the flat rolled markets.
The US market - another variable effective in the supply-demand equilibrium - remains silent, contrary to the other markets. Although there weren't major expectations in the US market for the first quarter, if demand emerges in the US market with the beginning of second quarter, the supply-demand balance may be tipped in the direction of demand once again, with a resulting increase trend seen in prices.