Банкеръ Weekly

Briefs

BOOM IN METAL TRADING TO CONTINUE IN 2004

The amount of metals traded in Bulgaria has grown almost 30 times for the past year, the Sofia Commodity Exchange (SCE) announced. Turnover in the sector is up to BGN85MN in 2003, as compared to BGN3MN a year earlier. Demand for reinforced iron, steel, and scrap keeps growing and the business with metals is already a leading part of the exchange trade. There are two major reasons for the increase, Vassil Simov, SCE Chief Executive Officer, said. First, transactions under the Public Procurement Act (PPA) have been allowed on the exchange since last July, and second, construction which is the main consumer of metals has expanded.Of all transactions under the PPA, the most interesting was one offered by the state-owned Bulgarian State Railways (BDZ) for delivery of new waggons in return to scrap ones. It's to be noted that deals with metals for melting purposes involved both state-owned and private companies. They offered scrap, some of which imported, between BGN80 and BGN140 per ton, depending on its content.However, in the first three weeks of 2004 offers were fewer, Sofia brokers claim. The most interesting positions in the exchange's new list are an offer for supply of 500 tons of metals with applied specification (at BGN600 per ton) and a purchase bid for copper sheet iron (at BGN1,100 per ton).Brokers on the Plovdiv Commodity Exchange can now trade at prices per kilogram. The change makes trading easier for the smaller buyers. A kilo of 20/20 mm wide and 100/100 long angles is traded at BGN0.68, and a kilo of hot-rolled sheet iron - at BGN0.75. However, construction steel is only offered in US dollars, because customers usually buy more than 5 tons of it. At present, reinforced steel can be bought between USD345 and USD352 per ton. Offers for cold-rolled and hot-rolled sheet iron are in dollars, too - the last deal made on January 15 included 18 tons of cold-rolled sheet iron, traded at USD307.Traditionally, reinforced steel imported from the Ukraine is the most traded commodity on the exchange in Rousse. Warehouses of the major importers are located in the town. Reinforced steel is traded at the lowest prices in this region. Rates are in levs per ton, and the last deals included re-bars of 12-16 mm diametre at BGN580/ton, VAT not included. Wholesale trade has registered considerable growth last year, the trade department of Stomana-Pernik announced. The plant is among the country's biggest producers. Over 90% of the 700,000 tons it produced have been exported. The remaining amount goes to Bulgarian distributors. Prices are stable, and discounts are available to ordinary customers. The company is owned by the Greek Viohalco group (which controls 75% of its capital) and the Bulgarian Eurometal (25%). Due to the investments made, the company already produces items of high quality demanded on the world markets. Plans for 2004 include a 20% increase of the production and introduction of a new installation for precise fragmentation of old vehicles and white machinery for scrap.Even wholesale deals are going down in January, the Christ-Com company informed. Calibrated iron is mostly demanded now. It is traded at EUR330 per ton for larger amounts and at BGN0.74 per kg for smaller ones.As a whole, forecasts for the metal business development in 2004 are optimistic. Domestic consumption of different types of ferrous metals used in the construction works is expected to grow, especially in regions where construction is more active - in Sofia, along the Black Sea coast, and in the mountain resorts. Export of products of high quality will be on the increase, too, because demand is significant on the world markets and Bulgarian prices are competitive. The commodity exchanges in the country, too, expect that trading will become active, and brokers in Sofia predict larger scrap deals will be signed no later than February.2003 Metal Sales on the SCE in BGNJanuary 59,063February 947,600March 46,175April 2,937,237May 377,209June 1,021,571July 3,185,174August 2,516,991September 3,163,671October 887,651November 2,308,662December 3,885,386

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