In March, the rise in prices for metallurgical products in all markets will increase - Ukrpromvneshexpertiza
In the second half of February - the first week of March, quotations increased by $ 40-65, depending on the region. The positive price trend was due to the announced state programs to stimulate economic development to overcome the consequences of the pandemic, which increased expectations of a recovery in demand.
In China, the New Year holidays are over, and buyers in most regions have begun to actively replenish stocks, thereby provoking a rise in prices. According to the analyst of "Ukrpromvneshekspertiza" Oleg Gnitetsky, a significant impetus to the rise in prices for rolled products was given by the rise in prices for raw materials. Since mid-February, the price of scrap on the Turkish import market has increased by $ 58-60 to $ 453-460 /t cfr, spot prices for ore in China have risen by $ 18-19 to $ 179.5 /t cfr.
In China, the increase in domestic prices in the first week of March amounted to $ 14-16 to $ 686-696 /t exw for billets, $ 740 /t exw for rebar and $ 762 /t exw with 13% VAT for wire rod. Billet export offers for the week increased by $ 25 to $ 600-620 /t fob, prices for rebar and wire rod rose by $ 10-15 to $ 665-680 /t fob and $ 685-720 /t fob, respectively. The rise in the cost of Chinese products provoked a rise in prices on the import markets of Southeast Asia, where billet quotations rose last week and varied in the range of $ 590-625 /t cfr. Rebar and wire rod were offered at $ 670-710 /t cfr and $ 695-730 /t cfr, respectively.
Demand is slowly growing in the MENA markets, where import prices for billets and rebar rose by $ 15 and $ 20, respectively, to $ 600-620 /t cfr and $ 645-685 /t cfr.
At the beginning of March, the growth of scrap prices in Turkey slowed down, which negatively affected the quotations of rolled products. Domestic billet prices increased insignificantly by $ 2.5, import quotations added $ 7.5. The cost of rebar and wire rod in the domestic market increased by $ 9 and $ 5, respectively. The export offers of Turkish companies rose by $ 10 over the week to $ 645-660 /t fob for rebar and $ 720-730 /t fob for wire rod.
Analysts of Ukrpromvneshexpertiza predict a moderate rise in prices in the regional markets for rebar and wire rod until the end of March. The market will benefit from the rebound in trade in China after the New Year holidays in February and the activation of buyers in the Middle East as stocks are replenished and pent-up demand is covered ahead of Ramadan.
In the second half of February, a positive price trend was observed in most regional flat steel markets. The increase in seasonal demand for steel, as well as the rise in the cost of raw materials and the cost of freight rates, were the main factors influencing the position of manufacturers. As a result, the price level in the segment of thin-sheet steel increased by $ 40-80 /t over the month, while the price increase in the segment of thick plate and semi-finished products was less significant.
So, in China, two weeks after the holidays, the spot price for hot-rolled and cold-rolled steel in Shanghai jumped by 300-340 yuan to 4990 and 5650 yuan /ton, and the cost of ore increased from 161 to 180 $ /dmt ... Export deals for Chinese hot-rolled and cold-rolled steel in early March were closed at $ 710-740 and $ 790-820 /t fob, respectively. The sharp jump in quotations is due to the expected cancellation of VAT refunds on the export of hot-rolled coils, an increase in demand in the domestic market, an increase in the price of iron ore, announced environmental restrictions in the Tianshan District.
In SEA countries, quotations for the month increased by $ 75-90 to $ 720-740 /t cfr for hot-rolled coils (at the lower limit, prices for Q235 /SS400 coils are indicated, and at the upper limit - at SAE1006) and up to 805- $ 835 /t cfr for cold-smoked rolls.
At the beginning of March, Turkish producers are offering rolled products manufactured in June, having already increased their prices for hot-rolled and cold-rolled coils, respectively, to 830-850 and 1050-1080 $ /t exw. The current transaction prices are still fluctuating in the range of 810-820 and 1000-1030 $ /t exw.
Sellers from the CIS countries, striving to get the maximum benefit from the situation in the markets of Turkey and China, raise their quotes several times a week. From mid-February, transaction prices in Black Sea ports have increased by $ 55-65 to $ 755-770 and $ 870-880 /t fob for hot-rolled and cold-rolled steel.
Predicting the future situation in the regional markets, Gnitetsky assumes an increase in March prices under the influence of several factors at once: high deferred demand for rolled products from the CIS with delivery in May; shortage of free volumes of rolled products in the Black Sea ports, taking into account the high volumes of contracts with enterprises from the CIS and Turkey; high prices for raw materials and sheet metal in Turkey and China; possible cancellation of VAT refund on export of hot-rolled coils in China.