Record price levels for Black Sea billet

Thursday, 08 February 2007 16:02:01 (GMT+3)   |  
       

This week the billet offers of Ukrainian mills were in the range of $470-480/mt FOB Black Sea. Italian rolling mills are not showing interest in these offers since they are able to find acceptable prices and early shipments in their domestic market. Similarly, rolling mills in Turkey, especially in the Aegean and Iskenderun, are reluctant to go for the Ukrainian offers since they can find billets at $500-510/mt levels. North Africa and the Middle East, however, seem willing at the present time to accept the offers from the Ukrainian mills. Russian billet has lost its competitiveness in the Mediterranean and Middle East. This week, $490-495/mt FOB Black Sea levels were heard for Russian billet. However, it seems that there are no customers in the Mediterranean and Middle East for these levels. Currently, the Russian mills are in the main concluding sales to Iran and Pakistan. The billet shortage still continues in the Turkish domestic market. This week, Turkish mill Isdemir increased its billet price to $500/mt. Kardemir's billet sales are still open at $495/mt. However, the import pressure may cause Kardemir to increase its prices as well. There are not much billet offers for export due to the lack of billet in the domestic market. Overseas customers appear obliged to accept levels at $495-500/mt FOB Turkish ports if they want to make purchases. The increase in scrap prices, the strength of longs prices, the lack of supply and the rumors of an increase in the export tariff for Chinese billet may provide further support for billet prices. In addition, the possibility of weak demand in Iran in March, the strong billet prices of the Brazilian mills, along with the possibility of customers focusing on the Middle East and Mediterranean again due to lack of supply may threaten price levels. The spring revival in Russia may compensate for the possible decline in demand in Iran. Furthermore, gains in the US market may encourage the Brazilian mills to focus on the US market again.

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