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Export prices for CIS flats keep sliding down - 29 Mar 11

Export prices for CIS flats keep sliding lower. Market participants report suppliers of local mills' products have not filled up April order book by the moment due to considerably slackened demand, and thus they have to reduce prices further. At the same time, suppliers of Ukrainian flats still consider Eastern Europe as the most promising destination, especially the Polish market, where they see steadily strong demand. Sellers also have an advantage from devaluation of the euro, which makes quotations of Ukrainian material in the US dollar terms more attractive. Russian suppliers can stay up in the market owing to demand from North and South American customers, with whom they have managed to close a number of deals due to much higher prices in their domestic markets. At the same time, demand for CIS flats from the Middle East has weakened substantially due to unstable political situation in the region. Given low sales levels, quotations of flats are most probably to fall deeper.        
While a week ago Zaporizhstal set April offers to large trading companies at March levels, now they have decreased by $20-35/t. In particular, prices for HRC to the Middle East and North Africa have dropped by $20-25/t, to $705-710/t FOB (about $690-695/t CPT) Odessa. Market participants report the supplier is ready to sell the material at $700/t FOB. CRC from Zaporizhstal are being offered at $805-810/t FOB ($790-795/t CPT) Odessa, by $30-35/t lower than a week ago. However, quotations of HR and CR flats may fall by another $20-30/t soon. In the Eastern European market the supplier has cut about $25-35/t off the upper end of the price range compared to March levels. Yet, further reductions are possible.
Besides, the official distributor of Zaporizhstal, Airol Metals AG, has reportedly made no offers of April production to Turkey yet.
Export prices for HRC from Ilyich have lost about $5-25/t over the same period. Middle Eastern and North African customers can buy the material at $705-710/t FOB Odessa or $685-690/t FOB Mariupol. Offers of Ilyich HRC to Eastern Europe are made at about $745/t DAP against $750-760/t DAP last week. The mill still does not offer any CRC for export.
HRC from MMK to the countries, where there are no import quotas, are priced at about $730/t C&F FOB Novorossiysk, by $10/t down from last week. A deal with Brazilian buyers has been reported at $785-790/t C&F, which means about $730/t FOB excl. freight rates. The latest contracts with SE Asian customers have been signed at $750-755/f FOB Vladivostok  The material was booked by trading companies, who probably bought the products for future sales, expecting the price trend to reverse in April as well as forecasting a surge in demand in the region on recent events in Japan.
 2-8 mm HRC from OMK-Steel have been reportedly offered at $760/t FOB Novorossiysk, in general by $20/t down from two weeks ago. However, supply is insufficient, and will hardly have any impact on the market.
(Source: www.metalexpert-group.com )         
Mar 29, 2011 10:55
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