Russia-based hot rolled coil (HRC) exporters are expected to mainly give solid offers for August production not earlier than next week, while some of them have already managed to sell some volumes over the past couple of weeks.
Russia’s MMK, according to sources, has been testing the market with around $410/mt FOB or $425/mt CFR Turkey since the end of last week, though with no response from Turkish buyers. In Egypt, however, bids were at $400/mt FOB, SteelOrbis has learned. Currently, the producer is not offering any solid price. The company plans to give around 100,000 mt of HRC for export in August with part of the volume to be booked to Asian markets, sources expect. As previously reported, MMK’s July production HRC was mainly sold to the domestic market in Russia. In addition, at the end of this month MMK is expected to restart operations at its 2500 mill, which will mean that the allocation specifically for September production will increase.
NLMK, another Russia-based producer, is still out of the market and is not in a rush to offer any firm price. According to sources, one of the reasons is that for August the producer’s allocation will be less than 50,000 mt and most probably the mill would not like to sell it cheaply.
Severstal, the third ex-Russia HRC seller, has been trading to the EU rather actively over the past couple of weeks, mainly selling at $420-430/mt FOB Baltic Sea, including pending orders from July. The most recent deals for August production were closed at $445/mt FOB and above, SteelOrbis has learned. The general volume for export from Severstal for August is estimated at less than 100,000 mt.
Overall, Russian mills are still enjoying lively domestic demand for HRC. “There is delayed demand in Russia and the CIS. The availability of coils has been less. We are processing a lot of material to sheets, strips and pipe for Russia,” a producer told SteelOrbis. According to sources, domestic HRC prices in Russia are at RUB 37,500-39,000/mt CPT Moscow, which means $445-463/mt CPT excluding 20 percent VAT and based on the exchange rate of $1 = RUB 70.2. In the middle of June, the dollar-denominated prices were lower by around $5-10/mt, as reported previously.
The August allocation for exports from Russia is expected to be around 220,000-230,000 mt of HRC, being more or less unchanged over the month as some expect that declines in allocation by Severstal and NLMK will be compensated for by the return of MMK, SteelOrbis estimates.
