CIS origin 3SP-5SP billets are this week being offered for export in the price range of $480-485/mt FOB Black Sea for August shipments. Italy and Turkey are not showing much interest in billet. Nevertheless, there is not much pressure on producers. After the Chinese export tax came into force, billet prices have not shown the expected increase; instead the Chinese effect completely has disappeared in the Mediterranean and Middle East and these markets are currently once again under the control of the CIS and Turkish producers. After an interval of almost three years, a CIS origin billet booking was concluded in the Far East - at slightly above $480/mt FOB Black Sea. CIS producers are trying to compensate for the absence of their traditional markets by making sales to alternative destinations.
Turkish billet prices in the domestic market are this week in a price range of $520-530/mt ex-works, excluding VAT. Although the domestic long prices are at good levels, rolling mills are not making huge tonnage purchases since their expectations are not very positive for the coming period. The latest billet export offers ex-Turkey are at around $500/mt FOB. The fact that the Chinese export tax has not pushed up billet prices has boosted the number of markets open to Turkish producers.
The Italian billet market is currently seeing calm movement in parallel with the weak longs market. Rolling mills are not interested in making purchases of either domestic or import billet. Billet prices for rebar production in the local Italian market are currently at around €400/mt ($545/mt) delivered to rolling mill, excluding VAT. In addition, billet prices for section production are currently at around €415/mt ($568/mt) delivered to rolling mill, excluding VAT. Billet prices seem more stable compared with the rapid decline seen in longs prices. However, if the domestic longs market continues in this way, domestic billet prices may also follow the negative trend. Import offer levels ex-CIS are at $510-515/mt CFR in Italy.
The global billet market is not showing much strength at the moment in parallel with the trend in the longs market. The export tax imposed in China was not able to prevent the reduction seen in prices in the Black Sea region. Nevertheless, it would be difficult to describe the billet market as being weak and it could even be said to be stronger than the longs market. It is not easy to find a prompt billet shipment from either the CIS or Turkey. Some alternative markets have opened up due to China's withdrawal from certain markets - and this is one reason why the global billet market is stronger than its longs counterpart.