CIS exporters of longs stay bearish. Middle Eastern and African buyers have become more careful while signing deals. Besides, CIS suppliers have had to cut their prices to Europe in view of fierce competition with local producers and other regional longs suppliers, but to no avail. Only exporters at Far Eastern ports have managed to avoid price reductions.
As previously reported, a sharp change of the pricing trend in the Azov-Black Sea basin was initiated by Turkish longs producers and Belarus SW at the end of last week. It has confused both other suppliers and buyers, who were rather optimistic previously. Most market participants have naturally switched to wait-and-see mode in the falling market. Trade is very thin in view of unstable situation in mid-June. However, the market remains calm, although other suppliers have also had to cut prices this week. But prices for wire rod will hardly roll back by more than $10/t in view of firm demand for it and limited availability of Turkish and CIS material.
Noteworthy, Turkish exporters have been forced to reduce their export quotations by $15-20/t w-o-w after a decline in domestic buying activity. In particular, Turkish rebar and wire rod are offered to overseas customers at $725-740/t FOB and $750-760/t FOB respectively. But not all Turkish manufacturers have dropped their prices, as they have already sold most of July output and are not in a rush to sell any more expecting demand for construction steel to improve in July ahead of Ramadan.
Meanwhile, Belarus SW has closed sales of July production of rebar, selling around 38,000 tonnes of the material at somewhat reduced prices to foreign markets. No sales of finished longs from ArcelorMittal Kryvyi Rih have been reported. The manufacturer has already cut its prices by $5-30/t w-o-w and is not going to drop them any further. The producer intends to delay signing of contracts until prices cease falling.
Metinvest International S.A. has reportedly sold most of July wire rod produced by Makeyevka SW and the latest contracts have been signed at $750-760/t FOB. Besides, the supplier, being one of the distributors of Moldova SW's wire rod, is offering July output at $760-770/t FOB.
CIS exporters are still unable to attract buyers in Europe despite concessions they make. Moreover, CIS material has become even less competitive this week due to revaluation of euro against US dollar. Romanian buyers refuse to buy wire rod and rebar at prices above EUR 525/t DAP and EUR 500/t DAP respectively. At the same time, in Italy workable levels are even lower – at EUR 500/t FOB for wire rod and EUR 480/t FOB for rebar, but suppliers are unready to drop their prices that low.
At the same time, exporters from Far Eastern ports feel good seeing steady demand for wire rod in SE Asia and on the back of limited supply of the material. EvrazHolding has been selling July output of wire rod at about $700/t FOB this week, like in early June.
Buyers of structurals have also become careful in view of bearish sentiments in the longs market in Azov-Black Sea basin. Their quotations have remained unchanged over the past week, but will probably fall soon.
( Source: www.metalexpert-group.com )