<span>The situation in the CIS export market for scrap keeps worsening in April. Major buyers of Russian and Ukrainian scrap, being unable to arrange sales of steel products in required volumes, have been making almost no purchases of the material for the last four weeks, thereby causing quotations to decline. In particular, bids in Turkey dropped by $10-15/t over the last week of March, which, in fact, blocked the access of most local suppliers to foreign markets. At the same time, while earlier traders hoped to make up for losses incurred in the second half of March at the beginning of April, now it is obvious that scrap collectors may try to strengthen their position only when the situation in the steel product markets becomes clear. So, mills have to cut offer prices for finished steel products every week to maintain at least current sales. Market players believe a price rise may happen in the steel product market but not until late April. <span> </span> <br> If this scenario takes place, local exporters should get ready to sell only small volumes for at least three weeks. Currently, only the companies which have rather cheap material in stock are able to close sales in Rostov-on-Don. The highest bids from Turkish traders have dropped to $430/t C&F for A3 scrap, which means $405-410/t FOB excl. transportation costs, while a week ago exporters were able to sell the same material by $10/t higher. Scrap collectors from Rostov-on-Don cannot accept new levels from Turkish mills due to high raw material quotations in the region. Taking into account a decline in buying prices for A3 scrap at ports (from $348-359/t CPT to $325-332/t CPT), exporters’ offers are uncompetitive, because local mills are bidding $353/t CPT to the suppliers even after a $18/t reduction. However, this problem may be wiped out by an expected price drop in the Russian market which will allow scrap collectors at ports to attract required volumes at lower quotations amid seasonally high raw material supply. <br> Exporters from the Baltic region of Russia face more difficulties. Apart from high buying prices, which reach $355-369/t CPT at ports of St. Petersburg, high freight rates also prevent them from exporting material. Currently, transportation to Turkey costs about $50-55/t, so the lowest acceptable levels are set at $465-470/t C&F Turkey ($410-420/t FOB) taking into account prices for remaining material. At the same time, promising sales to BMZ become less attractive. In addition to the problems with rolling stock disturbing regular supply to Belarus, the largest importer of Russian material has announced a decrease in purchase prices. The first cuts have been made on April 6. To resume export shipments by sea to Turkey at the current levels, traders need mills to revise bids by at least $30-45/t downwards in the domestic market. <br> Ukrainian scrap collectors are the only ones who still can earn profits under current foreign market conditions. As purchase prices at ports are now at $315/t CPT, local suppliers can accept lower quotations in Turkey, though this means lower margins. However, most Turkish customers doubt the quality of Ukrainian material and reliability of contract partners, and thus they make no purchases even despite considerable discounts. To minimize the risks, traders deliberately slash price to minimum, and Ukrainian exporters are reportedly receiving offers to close A3 sales at $405/t C&F. At the same time, market prices for the material are $420-425/t C&F ($400/t FOB). <br> <br> However, as Ukrainian mills have voiced a decrease in purchase prices in mid April, allowing exporters to revise their offers at ports, local traders may expect some contracts to be made occasionally this month even in the slow market. <br> ( Source: <a href="http://www.metalexpert-group.com/"><span><u><font size="3" face="Times New Roman">www.metalexpert-group.com</font></u></span></a> )</span>