Russian and Ukrainian producers have cut significantly output of merchant square billet for further exports due to long-lasting repairs of steelmaking facilities in summer. Total semis supplies from Russia and Ukraine to the global markets have been lowered to 0.6 mtpm since June, while some 0.7-0.9 mtpm were offered for exports every month in H1. The decline in billet supply led to the shortage of the material allowing the steelmakers to slightly lift prices for the material of July-August casting.
According to Metal Expert''s estimates, Russia and Ukraine will ship about 0.6 mt of semis to the foreign markets this month, which is close to July figures. At the same time, Russian mills continue to cut square billet output for further exports, while Ukrainian ones keep rasing it.
In August, Ukrainian steelmakers will produce and export 380,000-430,000 t of semis, up from 320,000 t in July. Higher shipments are attributed to the resumption of merchant billet production at Alchevsk SW, which plans to supply some 50,000-70,000 t to overseas buyers. Besides, Yenakievo SW is expected to increase shipments as it is restoring production after long-lasting maintenance of BOF No. 2. According to preliminary data, output of merchant square billet for further exports is expected at 60,000-65,000 t this month (43,000 t in July). A number of other Ukrainian mills intend to keep semis output stable or raise it by 5-10%.
Russian exporters, in turn, cut production of merchant square billet due to the repairs, unscheduled downtimes caused by breakdowns and some administrative reasons. Metal Expert estimates Russian companies will make 160,000-190,000 t of square billet for exports in August (255,000-260,000 t last month). Ural Steel will reduce supplies five-fold to 10,000 t in favour of domestic semis shipments. About 60,000 t of billet is to be supplied to the plants of NLMK-Long Products. ZSMK will cut square billet exports by a quarter, to 50,000-55,000 t because of the maintenance works at its BOF shop. Both REMZ and Volga-Fest keep steelmaking facilities idle due to a breakdown of the transformer. On the back of steadily good demand for finished longs, Novorosmetall is exporting minimal volumes, up to 5,000 tpm of billet.
The global market is slack now, but most producers of merchant square billet in Russia and Ukraine are expecting some improvement to happen in September after the holiday season in Europe and religious holidays in the Middle East.
In the first seven months of the year, square billet output for exports dropped by 25% y-o-y, to 5.1 mt in Russia and Ukraine. Russian mills reduced shipments to 2.4 mt (32% down) over the same period, while those from Ukraine – to 2.7 mt (20% down).
( Source: www.metalexpert-group.com )