CIS exporters of flats are strengthening their positions in foreign markets confidently, being encouraged by a surge in demand in a number of European, Middle Eastern and North American (USA) countries where buyers are restocking actively now, as well as referring to high raw materials costs.
However, some market participants believe sellers of flats have overestimated foreign customers’ abilities to accept new prices. Thus traders do not dare to forecast future developments of the market situation but they do not rule out a rollback.
Nevertheless, suppliers do not plan to give up so far. So, while Russia’s MMK set offer prices for HRC to the Middle East at $685/t FOB Novorossiysk a week ago, the supplier has raised quotations to $730/t FOB in a few steps later. At the same time, the mill has reportedly managed to sell out of all February output of CR products offered for export.
Ukraine’s Zaporizhstal, who had been waiting for more favourable market situation, has determined export prices for February production only this week and they have even exceeded MMK levels. As a result, quotations of the material to the Middle Eastern and Turkish buyers have risen by about $120/t, to $737/t FOB Odessa or $727/t FOB Nikolayev ($722/t CPT and $714/t CPT, respectively). However, these levels have not been accepted by foreign customers, according to reports. So, the seller, having estimated the current situation, has already started granting at least $20/t discounts. Export quotations of flats from Zaportizhstal to Central and Eastern Europe have jumped by $110-115/t.
It is uncertain how successful the talks are so far, but traders have already reported a few contracts with Turkish buyers at $730-740/t C&F (about $710-720/t FOB including the margin of the official distributor Airol Metals AG). However, Turkish consumers will probably find such readiness to cut prices rather attractive and will wish to deal at even lower levels.
A source in Metinvest International S.A. says February production of HR products from Ilyich has been already sold out and the supplier plans to voice new prices for March output at the end of January. Besides, buyers reported they received offers of HRC and CRC to be produced in February from the above mill at $700/t FOB and $810/t FOB, respectively, earlier this week.
In the Caspian region, CIS suppliers quoted $660-675/t FOB Aktau/Makhachkala at the beginning of working week in Iran, but reduced their offers afterwards amid minimal activity of Iranian buyers. Re-rollers and traders, who used to buy the material for later, have suspended semis purchases seeing that domestic market has not recovered yet. As a result, Kazakhstan’s Kasting, having announced offers of February production of billet at $660-665/t CPT Aktau ($670-675/t FOB Aktau), has later on reduced them by $30/t. No offers have been coming from REMZ to Iran; however, market operators estimate its quotations at $645-655/t FOB ($660-670/t FOB last week). Billet from Ural Steel is expected to be quoted at $640-645/t FOB, February casting. The trade is likely to resume soon but to be slack during the next two weeks.
In the Far Eastern ports, CIS billet suppliers are still absent from the market. Evraz Holding, having filled February order book, has not started offering March material. Taking into account the latest deals for semis between Asian buyers and regional suppliers at $680-700/t C&F and import duty on CIS material, the workable price for Russian billet is estimated at $640-655/t FOB.
(Source: www.metalexpert-group.com )