Business news from Ukraine

Business news from Ukraine

POSITIVE PRICE TREND EXPECTED ON METAL MARKETS – EXPERTS

The first ten days of February did not bring any changes in the cost of billets in the domestic market of China, prices remain in the range of $603-624 per tonne ton exw with 13% VAT, at the same time, export quotations grew slightly to $550-560 per tonne fob versus $550 per tonne fob a week earlier.

As noted in the press release of the Ukrainian Industry Expertise, the decline in trading activity on the import markets of Southeast Asia led to a drop in prices at the lower level by $5, to $540-560 per tonne cfr. By the end of the second week of February, incoming supplies began to increase in price again due to the rise in prices for scrap in Turkey.

Weak demand for finished products was a consequence of low business activity on the billet markets in MENA. Billet import prices range from $560-575 per tonne fob versus $585-615 per tonne cfr at the end of January. Proposals for billets from Iran for the sale of large batches decreased to $ 520-525 per tonne fob. At the same time, suppliers no longer make concessions in anticipation of the emerging tendencies to improve the situation in connection with the rise in scrap prices.

Together with the rise in scrap prices and the rise in domestic prices for rebar, supply of semi-finished products on the Turkish market shifted to the upper part of the range of $550-565 per tonne exw. The target level of Turkish importers, as a rule, does not exceed $540-550 pet tonne cfr, while supplies from the CIS countries come in the range of $550-565 per tonne cfr.

According to the forecasts of analysts, CIS producers in the coming weeks will seek to raise quotations by $10-15, using the rise of scrap prices in Turkey and the expected recovery in demand in China and Southeast Asia after the holidays.

On the rebar and wire rod market in China, demand is expected to recover after the holidays, as evidenced by the growth of quotations on the futures market in the first ten days of February. Domestic prices for rebar and wire rod strengthened by $3 over the week due to exchange rate fluctuations to $678 per tonne exw and $699 per tonne exw with 13% VAT, respectively.

On export routes, supplies of Chinese companies increased by $5-10 to $615-630 per tonne fob for rebar and $625-660 per tonne fob for wire rod. Import prices in Southeast Asia over the past two weeks have been $620-640 per tonne cfr for rebar and $635-670 per tonne cfr for wire rod. Moreover, further price increases are expected.

On the Turkish market, the rise in scrap prices and the rise in the cost of billets provoked a jump in domestic prices for rebar by $22, to $600-610 per tonne exw. Export deals last week were in the range of $590-610 per tonne fob, and the last supplies at the end of the second week of February did not fall below $600-610 per tonne fob.

Ukrainian Industry Expertise analyst Oleh Hnytetsky predicts that according to the rise in scrap prices, suppliers of rebar and wire rod in the coming weeks will test the market for increasing export quotations of products at the Black Sea ports by $10-15.

Low domestic demand and a rollback of export quotations since mid-January determine the downward price trend in the Ukrainian rebar market. In conditions of low final demand, excess stocks of rolled products in warehouses and a significant rollback of export quotations, traders were forced to make concessions and reduce domestic prices by an average of UAH 895 for rebar and UAH 740 for wire rod.

Traders’ expectations remain pessimistic as of late February – early March.