Victor Tarnavskiy- Rusmet/ The Middle East flat steel market still has not recovered after Ramadan, demand for these products remains weak, and most customers have not started yet active operations. However, many manufacturers have already announced the prices increase in October.
In particular, Russian products price increased by about $15-25 per ton as compared with September. Currently Russian companies are offering hot rolled coils to Middle Eastern customers at $ 620-635 per ton FOB, and cold rolled coils – at $ 700-720 per ton. Ukrainian producers have raised the prices to about $ 600 per ton or a little more. Commercial steel plate is offered at $ 630-670 per ton FOB.
The number of transactions remains low. Price of Russian hot-rolled steel with supply in Mediterranean countries and the Persian Gulf is about $ 650-660 per ton CFR. Turkish companies are very reluctant to make deals, preferring to buy local products, which prices are $ 630-660 per ton EXW (without VAT). The situation with the steel plates is the same. Erdemir is planning to resume plates output from October 1. According to preliminary data, plate price in October will be about $ 645-650 per ton EXW.
In the Gulf region, hot rolled coils are purchased at $ 640-660 per ton CFR. Indian companies offer their products at $ 660-670 per ton CFR, but it is almost not demanded. Until recently Chinese hot-rolled steel at $ 630-650 per ton CFR was present in the market. But by the middle of September Chinese companies have almost gone from this market or increased the prices. However, according to the traders in the Gulf region, they have a wide choice of suppliers, since hot rolled coils and steel plates are offered to the Persian Gulf by all the large market players including the Latin American and Japanese companies.
Although the stockpiles of the Middle East distributors significantly reduced during the summer, excessive demand is not expected in the nearest future. Consumers in most countries of the region hold rather careful policy and do not force the purchases. Besides, adverse expectations related to the economic slowdown in Western countries and in China have negative influence on the market. Previously, steel companies explained their products prices increase by raw materials costs growth. However in October iron ore and coking coal prices will go down, and scrap price, having reached $ 385-400 per ton CFR Turkey in the end of August has stabilized.
However, if exporters are able to avoid oversupply in the next few weeks, flat steel prices in the Middle East would slightly grow. Firstly, it is awaited by all market participants. Secondly, in region the construction industry should become more active and steel pipes prices have grown a little recently. Moreover, the emerging growth in October may not be continued in the next months.