Russian billet suppliers have started to announce much higher offers for foreign customers, given the firm scrap price trend. However, the latest increase has not been reflected in new deals as most customers are resisting such a sharp hike and are still trying to figure out what could be the fair price level for now.
A number of Russian exporters have voiced official offers at $550-560/mt FOB Black Sea this week, up strongly from the reference price of $510/mt FOB last week. But these new offers from suppliers are far from the real market level, sources have told SteelOrbis.
“I believe that a real rebound is possible only in September, when some mills will restock,” a trading source said.
In the Turkish market, all eyes have been on scrap bookings this week, while no solid offers or active negotiations for billet have been reported, even though suppliers are in an upward mood. Although there are doubts that the uptrend in scrap will last long, some of the indicative offers for ex-Russia billet have been voiced at $565-600/mt CFR, but most market players are considering such moves as an attempt to test the water. “What I see is everyone is waiting. All the prices rumoured around are for bookings in previous weeks. Today, literally no one knows anything,” a trader told SteelOrbis.
According to sources, around 10 days ago a Russian mill sold two lots to Turkish steel producers at $510/mt CFR and a couple of cargoes to re-rolling companies at around $520/mt CFR Bartin and at $525-530/mt CFR Iskenderun. However, the information has not been confirmed by the time of publication, while a lot of market players believe these deals could have been done. Today, although both sides prefer to wait and see, buyers’ price idea is evaluated at $570/mt CFR from smaller customers and at below $560/mt CFR for bigger importers. The true market level will be seen around next week.
Some offers for ex-Donbass billet have been reported at $570-575/mt CFR to Turkey, which translates to $530-535/mt FOB. But no deals have been done. Also, an offer for an ex-Azerbaijan IF billet has been reported at $575/mt delivered.
Along with ex-Russia and ex-CIS billet prices, Turkish buyers have reported there are offers from Iran at $530/mt CFR and from the GCC at $560-570/mt CFR. Although the offers are lower and seem more competitive, it is doubtful they will find wide acceptance due to longer lead times and related risks.
In the domestic market in Turkey, the general level is estimated at $600-610/mt ex-works. Demand has been scarce and integrated producer Kardemir has been able to sell only around 5,000 mt.
In Egypt, there were rumours regarding a 20,000 mt sale at $530-540/mt CFR, but most market players believe this information is either false or the deal was concluded a while back. The offer levels from the CIS were at $560-570/mt CFR before the scrap price increase and are now estimated at $570-585/mt CFR at least.
The SteelOrbis daily reference price for ex-Russia billet was increased by $25/mt on Tuesday, August 9, to $530-540/mt FOB Black Sea. But on Friday, it was corrected downwards slightly to $530/mt FOB with a lack of stronger bids from the major customers.