Sellers have managed to achieve an increase in latest billet deals from the Black Sea to Turkey, supported by the recent uptrend in the scrap segment and the offers for alternative billet origins which have been too high. However, a further uptrend is questionable.
According to sources, one contract for 20,000 mt of ex-CIS billet has been done at $505/mt CFR for December shipment to Turkey, which translates to $480/mt FOB Black Sea. Though this deal’s price level is in line with offers voiced last week, it is clearly above previous bids at $480-485/mt CFR. In addition, 5,000 mt of ex-Donbass billet have changed hands at $510/mt CFR Karabuk for shipment by the end of November. “There should have been some increase in billet after scrap, so this is not a surprise,” a trader said.
Offers of ex-Russia billet for prompt shipment and delivery in the middle of November are at $520/mt CFR. But there are doubts that buyers in Turkey will accept much higher prices, as scrap prices have stabilized.
Offers for other origins have been rare and too high for Turkish importers - at $530-540/mt CFR for Asian billets.
It has to be mentioned that, with the recent appreciation of the Russian ruble ($1 = RUB 92.2 on November 7, versus the previous rate over $1 = RUB 95), the export tax for billet from Russia has declined from seven percent to 5.5 percent. This may lead to some increase in offer volumes in the near future.
The SteelOrbis reference price for ex-Russia billet has increased to $475-485/mt FOB Black Sea, up by $5/mt from last week.