Although most of the hot-rolled steel export markets in the CIS countries, served by ports on the Black and Baltic Seas, still have tight restrictions on production in the Covid-19 environment, rolling mills closed their sales strongly last week. Some producers have achieved an average monthly gain of about $ 20 per tonne.
Consumer sentiment may have eased slightly in China last Friday, but that hasn’t stopped orders from picking up during the week in Ukraine. Plants in both the CIS and Turkey expect demand in China to return and prices will continue to rise in the current quarter.
At the same time, there is buoyant demand in Southeast Asia, with prices rising to $ 430 /tonne, or $ 40 /tonne, compared to the previous month. A large Russian Ural mill exported to Vietnam at the start of the upturn and sold large volumes at $ 390-395 per tonne, and net proceeds of $ 375 per tonne in Vladivostok. This allowed him to close his much wider June production books and even hook up to the July release, sources say.
Both China and Vietnam are also being viewed by Turkish factories as an alternative export destination for some of their traditional European volumes over the next few months. Sources suggest that at a time when investigations into guarantees will keep some EU buyers at bay. According to traders, at current prices and demand levels, only long delivery times to mills prevent more orders from increasing. They note that as soon as buyers start booking rooms in late September /October, competition may arise between suppliers from the CIS and Turkey.
CIS offers to Turkey were priced at $ 385-390 per ton, but no deals were made last week, as materials from similar prices came from Europe with a shorter delivery time. Saudi Arabia is also likely to phase out materials from the CIS in the current procurement cycle as shorter delivery times are available from Europe, although at $ 415-420 /t CFR the price would be acceptable.
Meanwhile, the former Baltic supplier has cut supply to Europe and also raised prices. But recent offers of cold rolled coiled ore to Turkey at $ 430 /t have been very competitive, traders say. The cold rolled steel market in Turkey is lagging behind in the recovery, as it is mainly used in the construction sector, the hardest hit industry.