Oversupply and an export duty were the main reasons for another round of price decline that began on July 19. The recent downward trend has been in line with market expectations, however, with market participants describing it as predictable and controlled.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, cpt Moscow, Russia was 62,500-66,000 roubles ($843-890) per tonne on Monday, including 20% VAT, widening downward from 66,000 roubles per tonne a week earlier. The upper end of the range corresponds to mills’ offers and deals with delivery made in August, and the lower end corresponds to those in September.

Supply was observed to be exceeding demand, although at the same time requirements from the construction sector were supporting trades.

Some Russian suppliers were heard to have been cutting volumes to reduce the pressure on domestic prices, sources said.

Balakovo, for example, is planning equipment maintenance in August aimed at adding new types of long products to the mill's portfolio, one trader told Fastmarkets. This has caused a substantial quantity of rebar and wire rod – roughly half a month’s worth of production – to be withdrawn from the market, the trader said, adding however, that this won't have a major impact on the supply demand balance in the Central Federal District. Supply is still likely to exceed demand in the region, the trader said.

Export duty has also been a significant factor in the current downward trend. Russia imposed a temporary export duty on steel products as of August 1. The tax on rebar for the period between August 1 and December 31 this year was set at a base rate of 15% but no lower than $115 per tonne. This was intended to restrict the rise in domestic steel prices. Domestic prices have now been sliding down toward parity with export and international prices.

Some local traders in Russia started monitoring export rebar prices in Turkey, pointing out that a decrease in Turkish prices is also a factor impacting the rebar price decline in Russia.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), export, fob main port Turkey, was $680-690 per tonne on Thursday August 19, down from $695-707 per tonne week on week.

In the secondary market, the price for rebar from large traders was around 65,000-70,000 roubles per tonne, down by 3,000-4,500 roubles from 69,000-74,500 roubles per tonne a week earlier.