CIS longs exporters are still mainly bearish. Despite limited availability, some of them have not yet sold out July production and demand stays very low. Although suppliers grant discounts to buyers almost every week, the latter refuse to sign deals.
Middle Eastern buyers continue to wait and see and plan to resume purchases when the prices reach their bottom. Market participants believe the seasonal upturn in demand, caused by the need to refill stocks in the Muslim countries before Ramadan, will start in the second half of July. Demand for wire rod and rebar will also be dull in Europe during the holiday season. Only in the Far Eastern market the situation was favourable to suppliers throughout June. However, buying interest in SE Asian countries is expected to weaken by the second half of July due to a decline in construction activity during rainy season.
Noteworthy, Turkish exporters are becoming less flexible, as expected. Situation in the raw materials segment has improved, so Turkish mills plan to start purchasing ferrous scrap in early June. Market participants forecast, scrap quotations will inch up by that time. Thus, it is not feasible for steelmakers to grant discounts and export quotations of Turkish longs fall at somewhat slower pace now. They have reportedly lost $5-10/t w-o-w. In particular, Turkish rebar and wire rod are currently available at $705-715/t FOB and $725-735/t FOB respectively.
However, suppliers of CIS material are not so optimistic. They have to cut prices further amid slack buying activity abroad. ArcelorMittal Kryvyi Rih currently offers only August output due to production problems. The company has had to cut its offers to the Middle East and North Africa by $10-35/t in a week in an attempt to attract buyers. As a result, the supplier has sold some wire rod volumes.
Only Russian and Moldavian mills have July production available. Russia's Novorosmetall has focused on domestic sales due to unfavourable market conditions abroad. Its latest rebar deals were signed at $685/t FOB in mid-June. Noteworthy, buyers bid $30/t below the level the producer quotes.
Moldova SW is also unwilling to grant additional discounts having dropped wire rod quotations by another $10/t w-o-w. But buyers insist that prices are reduced by $15/t again. The manufacturer has reportedly sold part of its July production at $750/t FOB, so additional reductions are unreasonable.
Metinvest International S.A. is currently sitting on sidelines, having filled July order book of Makeyevka SW. According to Metal Expert's data, the material to be produced in the first half of the month has been sold at $760-770/t FOB, and the rest of July output – at $740-750/t FOB.
Besides, in the first half of June MMK's July production of wire rod was reportedly offered to Iran at $725-730/t FOB Caspian Sea. However, buyers show no demand for import longs there, so no new deals have been reported yet.
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 availability of the material. Noteworthy, mainly trading companies buy their material to prepare for an upturn in demand for finished longs in autumn, when major construction projects are resumed after the rainy season.
EvrazHolding has been holding its prices steady for a month already, selling its material at $700/t FOB ($725/t C&F). Market participants report that the supplier has already started selling August material at these levels.
(Source: www.metalexpert-group.com )