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.