It is reported that the general outlook looks quite negative at Black Sea market of steel, surely in terms of general trend, but not a rapid fall down.

Market keeps the levels of the last week, but trends are clearer this time.

Working levels of billet price have reduced as compared to previous week by USD 10 per tonne to USD 15 per tonne. There are also proposals on lower level. Taking into account the current state of demand we think that “offer” price indication will come closer to current “Low”.

The same situation is for finished longs that lost about USD 5 per tonne to USD 10 per tonne last week.

For flats trend is a little bit different as we heard that latest deals from some producers were at increased prices. It seems to result as most of the producers have already booked their mills for December and are now trying to get orders for January. But in general “working interval” were on the same levels.

Change is on November 13th as compared to November 6th 2009
In USD per tonne

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(Sourced from www.steelprices-india.com)

The price level for CIS exports in Week 45 remained almost similar to last week but let’s say more down than up. But the situations remained a bit hazy as some deals / offers were reported at much more aggressive levels.

We can term last week as “lull before storm”. The main issue is that after some rush weeks, when market, moved by drive to contract November shipments, is now stable, but not based on last low contracted prices, but on increased offer levels after fulfilling their order books and coming back to “offer” level. So it looks like order book level is suitable for sellers at present and they try to keep prices. But soon they will have to start contract December and may have to come to lower levels to entice buyers.

Longs market is led by billets and almost all trends for finished products are an “adjustment” of billet tendencies, at least it is so for current CIS export. In general buyers do consider that they contracted expensive this time and I think once again will aim on USD 350 per tonne FOB levels.

The downward correction was somewhat visible for plates where some Ukrainian mills lowered their offers.

On the negative side, unexpectedly in October, some Ukrainian steel mills increased steel production to 2.7 million tonnes as against 2.4 million tonne sin September. The increased production is likely to sound death knell in the coming months, where the domestic demand would be hit badly with the arrival of winter.

Change is on November 6th as compared to October 30th 2009
In USD per tonne

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(Sourced from www.steelprices-india.com)

The prices in general kept the levels of the previous week although the demand in all segments was very low.

The billet market was the only one, where after quite “nervous” previous week, producers were able to more or less fill order books for next month and have pushed up offer prices a little bit.

It was also supported by signs that scrap prices are unlikely to fall further.

But demand and finished longs market is not good at all and we feel that the story will continue in nearest time.

On the other hand, ominous signs are appearing for flat products as Russian mills, after starting BF’s, are facing severe problems in loading their mills amid low domestic orders due to lowering of activities in winter season. It is learnt that they are becoming very active on export front with aggressive pricing. One transaction by a Russian major was reported art USD 500 CFR India for cold rolling grade HRC. Happenings in this week will set the tone for balance of 2009.

FOB Black Sea

Change is on October 30th as compared to October 23rd 2009
Change is per tonne

Reuters reported that steel billet prices in the Black Sea stabilized this week, supported by signs that scrap prices were unlikely to fall further. But traders voiced concern that some scant signs of buying picking up may merely be symptomatic of bargain hunting in the market, as opposed to signs of real demand.

Traders quoted Black Sea FOB billet between USD 380 and USD 410 a tonne, unchanged from a week earlier. Scrap prices remained around USD 250 a tonne, in keeping with the week before.

A trader said that "Now that scrap is at a comfortably low level, there should be a bold return of Turkish buying in the scrap market. Traders are expecting that if scrap prices start to move up then black sea billet will follow suit. There are some pockets of demand in North Africa and the Middle East, there is some construction activity going on there. But it's not enough to support the whole market, because Europe is dead."

One dealer said that "There is a little bit of improved demand in Turkey for merchant bar exports, but really that's the only market. Asia is flat, North Africa is flat, Egypt is terrible, the Middle East is bad, and the European markets are absolutely dreadful."

Demand for finished products is particularly weak. Billet prices have risen above USD 400 a tonne since early August, as producers have restarted some of the idled capacity due to improved orders. But many traders have attributed the price rise to cost pressures.

Mr Siddhartha Sengupta managing consultant of Hatch Beddows in London said that "In Western Europe and North America, while some recovery in demand could be expected from next year, it is not likely that demand will recover back to 2008 levels even in 2012. Therefore the capacity overhang is likely to be serious in Western Europe and North America."

(Sourced from www.reuters.com)

Change is on October 30th as compared to October 23rd 2009
In USD per tonne

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(Sourced from www.steelprices-india.com)

It is reported that the aftereffects of Chinese onslaught have started to appear at steel market at Black Sea as it remained in the negative trends this week.

As per report, steel billets prices went down by USD 15 per tonne to USD 20 per tonne.

In addition to “China” and “Turkey”, currently on the market, CIS players, especially Russian mills, are playing a major role in this price war as they need of fulfill their order books.

So, the pressure on supply side is immense.

On the other hand, demand side, continues to remain week. In absence of domestic demand of finished longs, steel makers, especially Russians, require to book semis.

HRC also went down by USD 20 per tonne. CRC is more niche and direct comparing to HRC. I see that Ukrainian proposals are following HRC while NLMK and Severstal keep previous levels.

Change is on October 16th as compared to October 9th 2009
In USD per tonne

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(Sourced from www.steelprices-india.com)