Local rebar in Russia, which has been overpriced for the past few months, has continued to decrease in terms of price. One factor is the lower demand during the winter season, another is cheaper raw material. However, some market players believe there could be a rebound, specifically in the Central region of the country, partly owing to the recent accident at MMK.
Over the past month, local rebar prices in Russia have decreased by $127-138/mt (RUB 11,000-12,000/mt) to $679-702/mt (RUB 60,000-62,000/mt) ex-works/CPT. While the producers in the Southern region are offering at the lower end and complain the trade is rather slow, the mills in the Central region of Russia are quite positive and are expecting to see $725/mt (RUB 64,000/mt) CPT and higher levels. “This time the price uptrend started in the Central region of Russia and it seems that the producers are trying to take advantage of the situation at MMK,” a source told SteelOrbis. As reported earlier, MMK has had a fire at a transformer at its longs producing asset and the problem may take a while to fix. Accordingly, although the share of MMK in the rebar market is not so large, the whole situation may have a temporary effect on market expectations.
In addition, Russia is expected to return to the export markets soon, given that the export duty will be abolished from January 1. “This may additionally spur the local market. In the Central region, it is still warm enough, but soon the weather will get worse and scrap collection will decrease, and so prices there will be firm,” a producer told SteelOrbis. Currently, some mills evaluate the workable export price for rebar at $690/mt FOB, but admit there are not many markets to sell it to. Taking into account that the local price has come close to the export price idea, mills are not willing to provide additional discounts to local buyers.
$1 = RUB 73.6