Russian HRC export offers lower than price of billet

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Russian HRC export offers lower than price of billet

KEYWORDS: Magnitogorsk Iron & Steel Works , MMK , hot rolled coil offers , cold rolled coil offers , billet price

Export offers for Russian-made hot rolled coil and cold rolled coil have remained unchanged for the past week, traders told Metal Bulletin sister title Steel First.

Magnitogorsk Iron & Steel Works' (MMK) offers for December-rolled HRC are in the range $510-$520 per tonne fob Black Sea for Africa, and $520-$530 per tonne fob for the Middle East.

The steelmaker is offering CRC at $600 per tonne fob Black Sea for Africa and $610 per tonne fob for the Middle East.

The HRC offers are lower than the price of CIS billet, which is currently being traded at about $530 per tonne fob Black Sea, creating an unusual market situation where a semi-finished product costs more than a more value-added one.

The price of billet has been inflated by costlier scrap, which the former is made of, rather than higher demand, traders said.

"The demand for flat steel is low, and people will be buying only small volumes for December, as they want to clear out their inventories by the year-end," one trader said.

"Demand is quiet, and it is likely to remain like that well into December," a second trader said.

But MMK's deputy ceo for sales Nikolai Lyadov said on the sidelines of the Russian Metal Market-2012 conference on Monday that he saw growth potential in the prices for December-rolled flat steel, having reached a bottom in November.

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