The broader macroeconomic environment also shifted during the week. A fragile ceasefire between Iran and the US pushed Brent crude prices lower, contributing to fluctuations in the Russian ruble. At the same time, rising domestic fuel prices continued to add inflationary pressure within Russia, creating uncertainty over the country's monetary policy outlook.
Export market enters wait-and-see mode
Russia's export market for semi-finished, flat and long steel products remained subdued throughout the week, with market participants describing trading conditions as virtually at a standstill. Both buyers and sellers largely stayed on the sidelines, waiting for clearer price direction before concluding new transactions.
According to market sources, available export volumes are limited, reducing the urgency for mills to sell aggressively. Many participants expect the market to establish new price levels over the next two weeks once more buyers return after the seasonal slowdown.
Russian billet export prices remained stable at $480/t FOB Black Sea, although the unchanged price reflected a lack of transactions rather than renewed demand.
Export offers for hot-rolled coil were heard at approximately $533-540/t FOB Black Sea, but these levels failed to attract buying interest during the week. Prices for cold-rolled coil, slab and mesh-quality wire rod also remained unchanged amid extremely thin liquidity, while no notable deals were reported.
Domestic HRC market continues gradual recovery
Unlike the export market, Russia's domestic hot-rolled steel market continued its gradual improvement. Although demand remains moderate, consumption has been sufficient to support steadily increasing prices without creating supply pressure.
Steel producers implemented another round of factory price increases for hot-rolled sheet and coil in July. Distributors now expect spot market prices to gradually align with higher primary market levels over the course of the month.
An additional sign of improving market conditions is the welded pipe segment, where prices have already exceeded coil prices in several regional markets, although Central Russia continues to lag behind. Producers also reported a modest improvement in the coated steel market compared with previous months.
Inventory discipline has also helped stabilize the market. Most steel traders continue to avoid building large stock positions, while steelmakers have benefited from maintaining export opportunities into Iran, providing an additional outlet for production despite generally weak global demand.
Outlook remains cautiously optimistic
Both steel producers and distributors remain cautiously optimistic that the domestic market will preserve its positive momentum through at least the end of July. Several mills are already considering additional price increases for August if current conditions persist.
However, downside risks remain significant. Rising government spending, expanding state support measures and increasing domestic fuel costs could complicate Russia's inflation outlook. Under these conditions, the Central Bank may pause further interest rate cuts or even consider tightening monetary policy again, which could weaken industrial demand and slow the recent recovery in steel consumption.
For now, the Russian steel market remains divided between a stagnant export sector waiting for post-summer price discovery and a domestic flat steel market that continues to recover gradually despite ongoing macroeconomic uncertainty.
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