Posted on 20 Apr 2020
CIS hot rolled coil suppliers were forced to reduce their offers again in order to secure sales last week. This resulted in several bookings to Turkey, China and southern Europe, Kallanish learns.
Despite higher scrap prices in Turkey, CIS hot rolled coil offers fell to around $370-380/tonne cfr Turkey the week prior, resulting in several sales last week. A Ukrainian producer sold a large volume to pipemakers at around $365/t cfr early last week. This prompted Russian suppliers to reduce offers further and settle several sales at $360/t cfr, sources say.
Meanwhile, China continued to book Russian HRC. Russian material is confirmed to have been sold at $385/t cfr last week. Another Russian producer sold to Italy at $385/t over a week ago.
Based on CIS domestic demand and demand in export markets, traders' expectations for prices to touch $350/t fob Black Sea levels have been justified, with several small bookings made last week. The partial relaxation of industrial restrictions to combat Covid-19 in southern Europe and North Africa is somewhat hopeful, sources say. This is especially considering how close the price of HRC is to the slab price level, with slab deals concluding at around $330-335/t fob Black Sea last week.
The rebound in slab prices last week and ongoing scrap shortage in scrap-dependent regions may also contribute to cementing the floor for CIS HRC prices. Market participants say suppliers are indicating output reductions as a next step, if bids continue to decline.
Source:Kallanish
