Press releases

Russian sheet prices droop as supply exceeds demand - 14 May 2012

Domestic prices for hot rolled and cold reduced cut sheets from major Russian integrated producers have weakened by 2.5-3% from April levels as supply is exceeding demand, market participants told Platts Steel Business Briefing.

Some stockists paused buying for almost ten days during a series of early May public holidays in Russia, which put mills’ prices under pressure. Demand has hardly progressed since the end of the holidays, a Moscow-based steel distributor noticed. Another complains about a general shortage of cash in the economy.

In Moscow, 2-3mm thick HR sheet is currently available at 23,000-23,100 roubles/tonne ($763-766/t) and 1.5mm thick CR sheet at 27,650 roubles/t. In Ekaterinburg, hot and cold rolled sheets are offered at 23,100-23,300 roubles/t and 27,500-27,600 roubles/t respectively. All prices are on a delivered basis and include 18% value added tax and a decoiling charge of 600-700 roubles/t.

Only HDG sheet prices rose in May, by 1.5-2.5% m-o-m and now total 35,600-36,300 roubles/t and 38,300 roubles/t for thinner 0.55mm gauge, all delivered with VAT.

The drop in prices is also explained by tightened competition on external markets and Russian mills’ resolve to offset squeezes there by high capacity utilization and unabated activity at home. Concerned with narrowing profit margins, they choose to bolster their output and force feed the domestic market, where demand has not picked up sufficiently, amid uncertainty about the destination of state contracts after the new government is formed in late May.

“None of us wants to cut production, but the market seems too tight to absorb it all and hence we are offering discounts to make deals happen”, a Russian steelworks source said. “But we are not going to yield any more. At the worst, the current prices will be prolonged into June”, he added.

 

Steel news in English | 中文 | Português | Español | Deutsch | Italiano | Русский

© Copyright Platts 2021, all rights reserved.
Back to top  Back to top