RUSSIA FLAT STEEL: Offers depend on producers’ capacity utilization

Russian flat-steel producers are in a bullish mood but, unusually for the market, their offer prices for February-rolled hot- and cold-rolled steel sheet differ widely, buyers told Metal Bulletin on Monday January 29.

The major suppliers are Novolipetsk Steel (NLMK) and Severstal.

“Both have increased their offer prices for February-rolled material, but Severstal’s price is still lower, even though it has revised it upward several times over the past two weeks,” a trader said, who has stocking agreements with both suppliers.

“NLMK says that it is well booked, and is planning maintenance [outages] at the end of February. That is why it is making higher offers,” he added.

Metal Bulletin’s price assessment for Russian 4mm hot-rolled steel sheet was 41,700-42,500 roubles ($740-754) per tonne cpt Moscow, including value-added tax, on January 29. This compared with 42,000-42,500 roubles per tonne cpt Moscow last week.

Stockists were receiving offers of HR sheet from NLMK at 41,700 roubles per tonne cpt Moscow, while the latest offer from Severstal was 41,100 roubles per tonne cpt Moscow. Later in February, however, when material will be bought from stock, the prices for HR sheet from both producers are expected to be equal, another source said.

A significant part of the steel trade in the Moscow region is done by traders who have stocking agreements with steelmakers. These agreements allow traders to buy material at any time during a given period – usually 1.5-2 months before the date of supply – at the price which is valid at that time.

Offer prices for non-stockist traders were close to 42,300-42,500 roubles per tonne cpt Moscow.

Metal Bulletin’s weekly price assessment for 1mm cold-rolled sheet in Russia was 47,200-49,000 roubles per tonne cpt Moscow on January 29, compared with 49,000-49,500 roubles per tonne cpt Moscow a week earlier.

NLMK’s offer price for February-rolled cold-rolled sheet for stockists was 47,200 roubles per tonne cpt Moscow, while Severstal’s material was on offer at 45,000 roubles per tonne cpt Moscow.

As with HR sheet, the offer prices for CR sheet from both major suppliers were expected to be equal when purchases are made from stock.

One stockist said, however, that suppliers have increased their CR sheet offers for him to 49,000 roubles per tonne cpt Moscow.