Despite the traditional seasonal lull almost in all foreign markets, CIS flats exporters still stay afloat. Moreover, by mid-August some suppliers had sold almost the entire September production after they created a shortage of the material in the market. And although most of them have failed to raise prices as expected, they have held them at last-month levels.
At the same time, only Iranian buyers show robust demand for CIS material, the Russian one in particular, like last week. Nevertheless, buyers in Northern and Western Europe have also become somewhat more active, starting to buy Russian flats. Besides, small lots of Russian HR flats have been booked to Israel. Market players say demand for Ukrainian sheets and coils may rally in Turkey, considering limited supply of the material, its reasonable price and an upturn in demand for welded pipes forecast in September.
Russia's MMK has managed to profit the most in the current situation. In particular, the major volume of its September HR material (around 120,000 t of 150,000 t allocated for exports) has been booked to Iran, probably because quotations of October output are expected to rise. However, the seller has been still forced to drop prices by around EUR 15/t from initial levels. As a result, the contracts have been signed at prices of end-July. Market players believe that the remaining volumes of the material will be shipped to Iran too, as demand is still firm there. Thus, seeing support from Iranian customers, MMK has raised its prices at Black Sea ports too. Moreover, scarce deals have been signed there at prices by $15-20/t higher m-o-m, though the producer has had to put down its initial offers by $5/t. Prices to Europe have added EUR 5/t over the past month for the same reason.
In mid-August Ukrainian exporters also returned to the market with offers of sheets and coils. Moreover, Zaporizhstal had managed to sell out its September output (70,000 t, 20,000 t down m-o-m) by the end of last week, as it had contracts left from previous months. HRC was sold at $690-695/t FOB Odessa, almost unchanged m-o-m ($690/t FOB Odessa).
However, traders working with the plant directly are in worse situation. While in mid-August some suppliers intended to jack up prices for Zaporizhstal's HRC to Eastern Europe (Bulgaria in particular) to $723/t FOB Izmail, by the end of last week they were forced to cut quotations to $700-705/t FOB Izmail. Nevertheless, buyers are unlikely to accept these levels, as offers of European material are more attractive. Middle Eastern and Turkish buyers continue to negotiate with suppliers to get discounts of at least $10/t.
Metinvest International SA still offers minimal volumes of September HRC from Ilyich only to Eastern European consumers. The upper end of its price range has added $10/t from end-July and buyers refuse to accept those levels. Thus, the supplier may have to make reductions.
( Source: www.metalexpert-group.com )