Russian coiled longs suppliers capitalise on Israeli market
Russian wire rod producers are facing a challenging market environment as global wire rod prices come under pressure from falling Chinese values, Kallanish notes.
Despite this, Russian producers are expected to maintain significant export volumes for coiled longs, benefiting from the export duty suspension, while also targeting the Israeli market, where buyers pay higher. This premium is partly driven by the limited number of suppliers willing to serve the region due to logistical and geopolitical risks. As a result, Russian wire rod pricing is largely dependent on the specific market.
"Today, we talked to the Turks about wire rod; they want $520-530/tonne cfr [Turkey]. Russian mills are currently ready to confirm at $525/t fob [Black Sea] and they don't see the point in selling for less," a trader notes.
For major markets, prices for wire rod are quoted in the range of $535-540/t fob, but producers say they can achieve higher rates. At the same time, as some Russian mills need to sell small lots of wire rod on a cfr basis to maintain a presence in a few established markets, and also due to higher freight costs for smaller quantities, mills’ actual sales prices might end up being lower, a second trader says. This would explain the indications at as low as $525/t fob.
“For the Israel market, wire rod is at $565-570 fob Novorossiysk and at $535-540 for other destinations, in terms of mills’ initial offers. For firm order proposals, they say they can consider some discounts,” the same source adds.
“Novostal-M, [mills from the so-called] DNR, and Tula Steel are interested [in export sales of coiled longs], but it’s unclear about the big mills yet. Severstal was checking last week, but the outcome is unknown,” the latter trader adds.
A mill source says wire rod in Israel is being traded roughly at $530-540/t fob, while rebar in coils is priced at around $580/t fob. With other foreign markets on hold, certain mills with a presence in Israel are focused on sales there, where rebar in coil is traded at $630-640/t cfr.
The trading source indicates long products from Europe are offered at around $700/t cfr Israel, while Russian products are at $620-625/t cfr. However, there is confusion over Chinese offers, he says. Bookings for China origin were made at $630/t cfr Israel, but traders miscalculated freight costs, so the next round of offers from the same source will likely be higher. This update came amid Monday's quotes at $475/t fob China for alloyed wire rod.
“Some countries are hesitant to offer to Israel. It’s not that simple,” the same supplier observes, explaining the high prices from China, Russia and Europe.
Another source confirms that European-origin wire rod is at $700/t cfr Israel, but there are quality concerns because shipments are currently coming from Greece and Romania.
Another trader believes Russian mills are insisting on $550-560/t fob Black Sea.
Truly global, user-friendly coverage of the steel and related markets and industry that delivers the essential information quickly while delivering on most occasions just the right amount of between-the-lines comment and interpretation for a near real time news service of this kind.
Anonymous
Very good overview of the weekly steel market.
Anonymous