Billet prices in the Black Sea region have rebounded slightly this week, supported mainly by the Turkish market’s improvement due to higher scrap prices and mills’ attempts to increase their longs offers. However, despite some cautious optimism, overall the billet sellers in Russia and Donbass still face challenges finding buyers. While some customers have agreed to pay a higher price for Russian origin and for prompt shipments, others are still placing low bids, especially for larger volumes coming from sanctioned mills.
This week, up to 20,000 mt of steel billet for prompt shipment have been sold from Russia at $510/mt CFR Karabuk, $515/mt CFR Aliaga and $520/mt CFR Iskenderun. The volume has been sold to several buyers in small parcels, SteelOrbis understands. “It is a high level but a normal one for very prompt and small cargoes. It is almost the same as buying from the local market in terms of lead time, but cheaper,” a trader said.
According to sources, Turkey’s price idea for the larger Russian and Donbass cargoes and for later shipments is much lower than the above. This week, offers have been reported at $500-510/mt CFR mainly for end of November and December shipments, while the bids, though having increased from last week, are still quite below $500/mt CFR. “I don’t think we are talking about $470/mt CFR price ideas since the scrap price has increased, but some still voice $480-485/mt CFR maximum as the workable price for buyers,” a source mentioned.
The SteelOrbis reference price for ex-Black Sea billet has increased by $7.5/mt on average since late last week to $470-480/mt FOB and the level closer to the lower end of the range has already been confirmed in deals. In particular, a contract for 10,000 mt of ex-Donbass billet to a trader has been reported at $472/mt FOB, though some sources claim that the price was $475/mt FOB. The material will be shipped in two lots of 5,000 mt each for shipment in late November and up to mid-December, respectively. Overall offer volumes from mills in Ukraine’s Donbass region, which is under Russian occupation at the moment, are still limited due to difficulties in sourcing scrap.
In Egypt, offers for ex-Black Sea billet have been coming at $520-525/mt CFR, translating to $480-485/mt FOB, with this level around $5/mt higher compared to last week. Some deals are awaited in this destination.
Turkey is not interested in billet of other origins at present since most buyers are not in a position to book over 30,000 mt in one shot and the lead time is too long. Offers from Malaysia are at $530-535/mt CFR for early December shipments, while ex-China indications are evaluated at even higher levels.
In the local Turkish market, a few sellers are offering billet currently and some of them have started increasing prices. One of the Iskenderun region-based producers has voiced $550/mt ex-works this week, up from $530-535/mt ex-works available in late October. Kardemir is expected to announce a minimum of $530/mt ex-works next week or even higher.