The enthusiasm was worn away by the falls in the prices of iron ore and China-origin HRC, as well as the weak demand in the market.
“The supply-demand balance is currently skewed toward the supply side,” a trader selling CIS-origin flat steel to Africa said.
However, on a positive note, the European market was expected to open up for Russian HRC assuming that no preliminary anti-dumping duties are imposed by the European Commission (EC).
And while the unofficial railway blockades in Ukraine remain in place, no violations of flat steel export contracts by the country’s sole exporter of HRC and CRC, Metinvest, have so far been reported.
There were no significant falls reported in the flat steel export offer volumes from the producer, either.
Metal Bulletin’s 62% Fe Iron Ore daily index fell by $11.97 during March and was $80.39 per tonne cfr Qingdao on March 31.
Chinese export HRC prices went down by $35-40 per tonne through March, amid a weakening of the domestic market, and this trend was expected to continue in April.
Metal Bulletin’s price assessment for CIS HRC exports was $485-495 per tonne fob Black Sea on Monday March 27, down by $5-10 per tonne from $495-500 per tonne fob on March 6.
The price assessment for CIS exports of CRC was $555-560 per tonne fob Black Sea on March 27, having stayed stable through the month.
Ukraine railway blockades
Several Ukrainian long steel mills have had to suspend production and shipments due to raw material supply problems, after a militant pro-government faction blocked a number of points on the railways connecting areas controlled by the Kiev-based central government and pro-Russia separatists in the Donetsk and Luhansk regions in late January.
However, the HRC- and CRC-producing mills owned by Metinvest, Ukraine’s major flat steel exporter, continued their operations, albeit at reduced utilisation rates.
Zaporizhstal, Ilyich Iron & Steel Works and Azovstal Iron & Steel Works are operating at 79-95% capacity, Metinvest’s head of operational marketing and price control, Maksim Zhuravlev, told Metal Bulletin at the end of March.
Both the Ilyich and Azovstal mills make slab and plate, while Ilyich also produces HRC and CRC. Both mills are in the parts of Ukraine affected by the railway blockades. Zaporizhstal is outside the affected zone.
“Still, buyers are treating Metinvest’s HRC and CRC offers with a degree of distrust, due to the situation with the railway blockade,” a trader selling CIS flat steel to Africa said.
Meanwhile, an opportunity for Russian steelmakers to resume HRC sales to the EU emerged, as the EC was not expected to impose preliminary anti-dumping duties on the country’s products.
This followed the start of a registration process of such imports from the country in January.
“We are watching the situation closely, and are hoping to resume our HRC sales to Europe,” a source at a Russian steel producer said.
In March, Metal Bulletin published an analysis of how the introduction of import duties on Russia-origin CRC in Europe has had knock-on effects in Turkey, India, South Korea and the USA.
Lee Allen in London contributed to this report.
Prices for CIS-origin export hot rolled (HRC) slipped by $5-10 per tonne over the month of March, while those for cold rolled coil (CRC) stayed stable, as the mood of the market changed to pessimism from the optimism seen in February.