Posted on 03 Feb 2020
The CIS hot rolled coil export market was quiet last week after the last of February-production volumes were closed a week prior. Participants are observing the effect on the market of the Wuhan coronavirus outbreak, but the majority see further price increases, as supply remains tight and costs high, they tell Kallanish.
None of the Russian suppliers are in the market, although traders with long positions were observed making tentative attempts to offload material. Asian offices are now opening for business after the Lunar New Year break, albeit slower than in previous years due to the virus outbreak. Fresh seasonal demand is therefore expected to stimulate sales, especially as regional offers are climbing up already (see separate article).
Russian mills' availability remains constrained by rising domestic enquiries. This is on the back of the beginning of the new construction season and a major supplier's absence from the export market due to a rolling mill upgrade until June. Traders estimate around 1 million tonnes of HRC will have been taken out of the market as a result of this several-months-long enterprise.
This has enabled the Ukrainian supplier to offload its February-rolling coils at relatively high prices. This is despite it having to discount its original $495-500/tonne cfr offers to Turkey to around $490-493/t cfr, as it closed large volumes of HRC sales to the country. The supplier was heard willing to close more volumes at $490-495/t cfr Turkey, for March production, but buyers in Turkey remain on the fence.
Traders are now expecting further increases in HRC prices, taking into account seasonality and the shortage, coupled with high cost of production, they say.
Source:Kallanish
