Rusmet.ru, Victor Tarnavskiy/ In Jan. Russian and Ukrainian manufacturers of flat steel gained the prices increase for the steel delivered to Middle East for about $30-40 per ton. The price for Russian HRC reached $585-605 per ton CFR; CRC reached $680-700 per ton CFR. Ukrainian HR steel and plate prices amounted $550-565 per ton CFR. These prices, set in the middle of Jan. just after the holidays remained the same till the end of the month.
Today metallurgical companies accept the orders for March and set new prices on March contracts. The situation in the market is not easy. The demand in the region remains rather weak. Even in Turkey, which is the leader industrial country of the region, steel products consumption has somewhat decreased as compares to the end of last year. The consumers hold the waiting policy and do not hurry to conclude new agreements.
The same situation is in the EU countries, where steel manufacturers faced the same demand shortage problem. However, they are going to increase the prices. The expenses growth and low profitability level give to metallurgists no other chance except the quotations increase.
Nevertheless, Feb. prices increase promises to be much lower than in Jan. Turkish Erdemir, which did not change the quotations on Feb. contracts, announced rather moderate increase in March. HRC prices will grow by $25 per ton, to $570 per ton EXW; CRC prices will grow by $5 only, to $665 per ton EXW. Iranian Mobarakeh Steel at the export tender in the end of Jan. managed to gain $580 per ton FOB for March shipments to EU and Middle East. Although earlier it counted on $600 per ton FOB.
Thus, the manufacturers from CIS are unlikely to gain significant growth of the prices in Middle East in the beginning of Feb. Turkish sources say about Ukrainian HR steel to Turkey at $560-570 per ton CFR, i.e. up $5-10 on the previous month. Obviously, the buyers of Russian steel should also expect some increase.
Long-term perspectives of the regional market also do not look positive. Egyptian EZDK, which concludes the agreements for the shipment in may, offers HRC to Saudi Arabia at $640 per ton FOB and forecasts moderate growth for the nearest months. In the last months of 2009 “forward” quotations of the Egyptian company were much higher than current ones.
Certainly, metallurgists can comfort themselves by the fact that in Middle East countries nobody expects steel products prices decrease in the nearest months; although the significant increase is not expected as well. However, the situation can change for the better, if flat steel prices in Europe and Eastern Asia increase in Feb.-March.