A fall in the world flat steel products is observed now. Consumption of these products in autumn turned to be much lower than producers expected and revival of buyers activity in the first half of September was followed by fall of sales in October. Consumers as a rule have good stocks and don’t hurry with new purchases waiting for further decrease.
Russian flat steel producers tried to lift quotations for their products offering hot rolled coils for $ 600-630 per ton FOB St.-Petersburg or Novorossiysk. With no demand from Turkey where local process for hot rolled steel did not exceed $ 620-650 per ton EXW (VAT excluded), major bids were for East Mediterranean countries and North Africa where this products could be sold for $640-660 per ton CFR. However, capacity of this market was insufficient: purchases ceased rapidly so suppliers had to make concessions to them.
Ukrainian steelmakers have first of all European countries as an alternative to Turkey, where local steel products became essentially more expensive (by $50-80/t) than imported one due to Euro exchange rate growth to dollar. However in unclear economic situation European buyers preferred to wait rather than to sign new import contracts.
As a result suppliers from CIS started to offer their November production had to reduce their quotations. Russian hot rolled coils fell in price to $590-610 per ton FOB, Ukrainian material is offered by $570/t to $615/t FOB, but upper margin by words of distributors is a “fake": actually it is very hard to find a buyer for Ukrainian hot rolled steel with price over $600 per ton FOB. Turkish companies have an interest in this product but only if the price will not exceed $600 per ton CFR.
Quotations for Ukrainian commercial heavy plate are $605-610 per ton FOB at Donetskstal to $650-660 per ton FOB at other producers in mid-October, but buyers in Middle East are aggressively knocking prices down.
Cold rolled coils which were offered in the beginning of October for $750 per ton and higher now became cheaper to $700-720 per ton FOB for both as Russian as Ukrainian origin.
As some traders remark, dropped prices lad to some increase of demand for flat steel from CIS however it is not a time to speak about stabilization of the market. A lot of buyers require further abatements. They have stocks but the most probably the most of them will have to renew purchases at least for a bit before December.
Much within the next few days will depend on how the events turn to be in Europe and East Asia. Dramatic fall of Euro quotations in EU is likely to influence Middle Eastern consumers, having born correspondent expectations at them. Middle Eastern market players in the same way monitor price level in East Asia. There is merely no Chinese steel now offered in the Gulf region.
In general there is some balancing of prices for hot rolled coils within the interval of $600-650 per ton CFR in the region Europe – Middle East. And in case if no dramatic movements from suppliers part, the prices could stabilize at this level to make a trial for increase in the end of the year.