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On the regional markets of metallurgical products, prices are balancing in a narrow corridor

Ukraine / Analytics
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The first decade of July brought an unstable equilibrium in the regional procurement markets. A similar situation has developed under the influence of a seasonal decrease in demand for finished products, a decrease in trading activity and a high cost of raw materials.

On the regional markets of metallurgical products, prices are balancing in a narrow corridor

The exception was China, where domestic prices continue to rise steadily under the pressure of production restrictions and a possible shortage of supplies. Starting from the second week of July, prices have increased by $ 17, amounting respectively to $ 792-811 /t cfr with 13% VAT. Chinese importers are showing an active interest in import supplies and are ready to conclude contracts for $ 705-710 /t cfr. The current situation contributes to the growth of prices on the import markets of Southeast Asia, where, despite the still low demand, supply strengthened to $ 670-710 /t cfr against $ 670-700 /t cfr a week earlier.

In Turkey, the cost of billets fell by $ 5-10 under the influence of low scrap prices and a decline in trading activity ahead of the long holidays. Turkish billet on the domestic market is offered at $ 680-695 /t exw, offers on the import market fell to $ 665-675 /t cfr.

Ukrpromvneshexpertiza analyst Oleg Gnittskiy predicts that due to resistance from buyers and traditionally low demand in the summer, the most likely scenario in the coming weeks will be mainly a sideways trend. However, in August, high prices for raw materials and a revival of demand for finished rolled products with delivery in September-October will lead to an upward trend.

Seasonal factors and upcoming vacations are not conducive to the conclusion of deals in the long rental markets in the EU, Turkey and MENA countries, their number has been reduced to a minimum. The strengthening of the negative trend is facilitated by the weakening of prices for Turkish scrap metal, the producers of which keep prices from falling and do not make significant concessions.

In the EU, rebar offers range from € 900-920 /t with delivery. In the US, manufacturers have announced a $ 33-44 price increase for rebar and wire rod.

In Turkey, exporters continue to hold offers in the range of $ 730-760 /t fob for reinforcement and $ 850-860 /t fob for wire rod, providing discounts of no more than $ 5 when selling large batches of rolled metal.

Low activity of buyers continues in the MENA markets, where the last known transactions on rebar on the import market were at $ 745-780 /t cfr.

In China, a decrease in daily steel production in the first ten days of July by almost 5% pushed traders to intensify the replenishment of warehouses (total stocks of rebar and wire rod from the beginning of July increased by 334 thousand tons to 10.807 million tons). As a result, prices for rebar and wire rod in China in the second week of July increased by $ 22-25 to $ 810 /t and $ 860 /t exw with 13% VAT. Export offers rose $ 10 to $ 790 /t fob for rebar and $ 840 /t fob for wire rod.

In Southeast Asia, demand remains weak due to the rainy season and the threat of another wave of coronavirus. Most of the deals take place at the lower end of the ranges of $ 735-815 /t cfr for rebar and $ 750-850 /t cfr for wire rod.

According to Gnitetsky, until the end of July, prices for rebar and wire rod in the Black Sea ports will maintain a predominantly sideways trend due to weakening demand due to the start of summer vacations in Europe and a seasonal decrease in consumption in the construction sector in MENA countries. In August-September, as the demand for autumn supplies increases in the context of limited supply volumes and the introduction of 15% export duties in Russia, an increase in upward sentiment and the formation of an upward trend is expected.

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