Posted on 16 Mar 2020
CIS hot rolled coil exporters are in the market with offers of May-loading material, but sales are absent with demand evaporating towards the end of last week, Kallanish learns from market participants.
CIS HRC suppliers are particularly vulnerable now, as their supply volumes are returning to normal levels, while demand is falling more each day, sources say.
Offers of HRC remain at stable levels, somewhat surprisingly. The rouble's depreciation against the dollar on Monday last week could have enabled Russian producers to lower offers in order to secure sales, at least in markets where demand was still present, such as Turkey.
Offers to Turkey from two major Russian suppliers were at $490-495/tonne cfr for large coils for May and June delivery, but no sales have taken place, according to sources. Turkish re-rollers and processors instead continued to buy high-quality, shorter-lead-time Asian-origin material at $490-495/t cfr (see separate article). These same Russian suppliers were also offering slab to Turkey at $415-420/t cfr, but these offers were rejected, with bids tabled at $405-410/t cfr.
One large lot of Ukrainian small coil HRC was sold to Turkey at $472/t cfr. The supplier's offer to Egypt at $485/t cfr was not accepted, traders say. A Russian ex-Baltic shipping supplier reduced its HRC offer to €400/t ($444/t) fob, but no sales were made.
Traders noted a severe decline in demand at the end of last week amid the spread of Covid-19 and resultant restrictions on industrial activity. Almost all traders now agree trade activity will diminish further due to uncertainty.
Despite the slowdown of new infections in China, the country’s stocks are high enough to limit any pick-up in trade in the next few weeks, while lower oil prices are further complicating the flat steel market recovery.
This is already evident from the further weakening in some of Asia's major markets, such as China and Vietnam, where prices fell further at the end of last week, and from Indian export offers, which were lower on-week, traders note.
Source:Kallanish
