Flat steel prices fell in Russia’s central federal district around Moscow due to oversupply in the week ending Monday, September 27. Export prices also did not support Russian manufacturers’ efforts to achieve domestic stability. Prices fell despite strong buyer interest from low-inventory local shareholders. This week’s resale demand was not fully met, and manufacturers preferred to accept only large quantities for conventional steel grades. Market sources said that this means that the market floor will probably be touched in these days. The world steel market has undergone major changes due to developments in China.
*** Russian steel market on the way to falling prices
Sources told Fast Market that with prices falling further, it is now unlikely that shareholders will be encouraged to place more orders after considering alternative import offers. This issue is strongly influenced by the Chinese steel market. Capital Economics wrote in a note that given that Chinese officials are actively encouraging lower steel production, there is a possibility of further declines in the coming months. Admittedly, China’s daily output was down 10.50 percent in July, but the government is still serious about curbing steel production.
*** Evaluation of the Russian steel market in the hot rolled sheet sector
The weekly Fast Market assessment for hot-rolled steel sheet, domestic, cpt Moscow, Russia 67,000 rubles ($ 922) per ton on Monday 27 September, including 20% VAT. This amount of 3,000 rubles ($ 41) per ton has decreased compared to 70,000 rubles per ton last week. Hot rolled steel sheets Novolipetsk (NLMK), iron and steel Magnitogorsk (MMK) and Severstal 67,000 rubles were available and transactions were reported by shareholders at the same level.
*** Take a look at the Central Asian steel market
Hot coils from Arslumital were offered in Kazakhstan at a price of 55,000 rubles per ton, and the estimated cost of converting coils to sheets is about 2,000 rubles per ton ($ 27). However, the offers of hot rolled coils have not met with success. In the week ending Monday, September 27, there was a lot of interest in buying local shareholders. But since then they have refused to buy. The drop in prices was reported in July after Russia announced a temporary export tariff from August 1 to December 31 with the aim of relative market equilibrium. Despite increasing demand for re-warehousing, prices are falling with oversupply. The Russian steel market has exacerbated this in Asia.
*** Partial allocation of funds to the purchasing department
Shareholders say they can order for ordinary commercial sheets, but in some cases, factories have approved only partial allocations. While the requirements for the grade of high-strength steel at the time of release were not accepted. Traders say NLMK and Severstal both gave unreliable reasons for their reported rates. The shortage of workers for the sheet cutting lines is due to the coronary heart disease.
*** Fast market estimates of sheet prices in the Russian market
The weekly fast market price estimate for steel sheet, domestic, cpt Moscow, Russia on Monday was 67,000-70,000 rubles per ton. That amount had dropped from 3,000 to 5,000 rubles ($ 41-68) per tonne from 70,000 to 75,000 rubles per tonne the previous week. One shareholder told the fast market that the MMK 8-25mm heavy plate was available for 67,000 rubles per ton. While the 25-50 mm screen was offered at a price of 70,000 rubles per ton of cpt. The Russian steel market is on the decline.
*** Start Asha Steel maintenance
Shareholders told Fast Market that Asha Steel has been planning maintenance for two weeks from October 1. As a result, no information is available from the manufacturer. Metinvest Ukraine flat sheet was offered at a price of 70,000 rubles per ton. But the long duration – 40 to 50 days – and similar or more attractive offers from MMK has discouraged buyers.
*** Cold sheet price evaluation
Following the downward trend in the hot rolling sector, the price of cold rolled sheets continues to decline. The weekly valuation of the fast market for cold rolled steel sheets, domestic, cpt Moscow, Russia on Monday was 79,000 rubles per ton, which decreased by 3,000 rubles per ton from 82,000 rubles per ton last week.
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