Due to instability and uncertain forecasts for economic development, the situation on the Russian long product markets continues to deteriorate. Pessimistic expectations prevail among market participants due to weak demand and the delay in the recovery of consumption in the construction sector. End consumers are in no hurry to replenish their stocks, limiting themselves to the minimum quantities needed to meet current demand and postponing their purchases until the situation becomes clearer. This week, the price of rebar from Russia is around $530-540 FOB Black Sea. The market situation is expected to improve gradually in early April.
How is the domestic rebar market in Russia?
Companies are seeing scrap metal prices and logistics costs rising; the rising cost of credit is also an important factor. Therefore, it is critical to bring spot prices in line with the primary market, as well as to achieve a positive margin of at least 1.5-2.5 thousand rubles per ton. This means that by the summer the cost of rebar will approach 70 thousand rubles per ton with VAT.
In the last two weeks, almost all companies in Moscow have raised the prices of rebar on their price lists. The scale of the increase varied for all of them. Some limited themselves to 0.5 thousand rubles per ton, while others added 2 thousand rubles. One way or another, the minimum level for A12C products of 500 mm size has now reached 64 thousand rubles per ton.
External factors are currently affecting the Russian market quite negatively. The fall in prices for scrap metal and steel products in Turkey has led to a corresponding fall in domestic billet prices. The ruble exchange rate is at the most unfavorable level for exporters - just over 90 rubles per dollar, which is why export parity has fallen to its lowest level in more than a month and a half.
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