In recent 1.5 months the prices for slabs and flat products of Russian and Ukrainian origin kept decreasing. Due to low demand for semis and flat steel in East Asia, Europe, and Middle East the suppliers had to make concessions and gradually decrease their products prices. In particular, by the end of the first half of Nov. the prices for slabs of CIS origin fell to $500-530 per ton FOB compared with about $550 per ton FOB in the middle of Sep. The exporters have to yield to pressure from East Asia rolling mills which reduce semis prices due to HR steel prices decrease in the region. In early Nov. slabs supplies to Far East were provided at $565-585 per ton CFR. However, today the consumers refuse to buy these products at the prices higher than $570 per ton CFR
In late Oct.-early Nov. Russian companies offered HCR to India and South-East Asia. The prices gradually decreased from $630-640 to $615-625 per ton CFR. However, there are practically no contracts. The buyers consider these prices too high and try to reduce the prices to less than $600 per ton CFR.
The demand for flat steel from CIS during the first half of Nov. was very weak and disappeared at all in the end of last week due to the Muslim holiday Kurban-Bayram. Before the most of Russian and Ukrainian flat steel exporters reduced the prices for Dec. by $20-40 per ton. Russian and Ukrainian products prices almost equaled. The companies from both countries offer HRC to Middle east countries at $550-590 per ton FOB; CRC prices are $690-710 per ton FOB. According to traders, in the first half of Nov. Turkey almost stopped flat steel purchases from CIS. Turkish distributors still prefer domestic the products mills which offer HR steel at $610-640 per ton EXW (without VAT).
Russian companies exhausted the quota for HRC supplies to EU as early as in Oct. Ukrainian companies reduced their prices to $610-630 per ton DAF due to general decrease in European market. Ukrainian Ministry of Industry reports that, despite the fact that Ukraine is GTO member, Ukrainian rolled steel supplies to EU in fact are being quoted. At the same time European representatives notified Ukraine about antidumping claims as the reply to the inquiry on the quotas expansion.
Nevertheless, main problems of CIS flat steel manufacturers seem to be passed soon. In east Asia in the beginning of the Q1, 2011 iron ore prices increase is expected. Today iron ore prices reached in spot market the maximum in recent half-year. In this connection slabs prices have to increase as well. Some companies say today about prices increase in Jan. by $20 per ton.
Next week, after the end of the holidays Middle East buyers will return to the market. In recent 1.5- months there were no large purchases. Due to this the stockpiles in the region are rather low. A rally can start in Dec. in Europe. Local companies try to face the new year with minimal stockpiles and start to refill them from Jan., the analysts say. We should not rely on significant growth in the nearest months. However, at least flat steel prices will stop decrease and will start growth.