CIS-based billet producers have continued to increase export prices actively this week as demand, especially from Egypt, has continued to be observed and overall allocation, not only from mills, but from traders as well, has been limited. The major exporters are targeting $670/mt FOB and above at the moment.
A deal for 15,000 mt of ex-Ukraine billet was done to Egypt at $665/mt FOB last week, as SteelOrbis confirmed recently, with the CFR price being slightly below $700/mt. Though some sources said that the material was with high manganese content with around $7/mt extras, a few sources close to the seller confirmed that it was for base grade. “At the moment $670/mt FOB is a workable level for billet,” one major CIS-based seller said, mentioning that demand from Egypt has continued to support the uptrend of ex-CIS billet prices strongly.
Customers from Egypt were accepting $650-655/mt FOB earlier last week and, after $665/mt FOB Black Sea was fixed in a deal, suppliers from the CIS have started to ask for $670-680/mt FOB for April shipment, though no new deals have been reported so far this week.
Apart from Egypt, a deal for ex-CIS billet has been rumoured to another North African country at $660/mt FOB or slightly above, but there has been no confirmation of it by the time of publication. Some sources said that it is a bit old deal and “Today offers are all $670/mt FOB min,” a large mill said. Buyers from Tunisia are not ready to pay above $650-655/mt FOB Black Sea, according to sources.
“Europe may pay higher [compared to North Africa], but supply is limited,” a trader said.
Demand from Turkey has remained muted and not so supportive for ex-CIS billet prices. Customers have been focusing on local purchases, which reached $680-690/mt ex-works. Major CIS-based mills have increased prices to Turkey to $700-710/mt CFR, which has not attracted any attention from buyers due to still low rebar prices in the country. Some rebound in trading is possible in the case of a stronger increase in rebar prices in Turkey (local and exports) later in February.
The uptrend in the ex-CIS billet market has still some potential to continue, even though the space is limited and prices may stop rising at around $675/mt FOB, sources believe. An increase in long steel prices is awaited to support billet prices further. “The market is waiting for China’s return to see how much they will start to buy again. In any case, the market [of ex-CIS billet] will remain positive for a few weeks because of limited allocation,” a trader said.
The SteelOrbis reference price for ex-CIS billet has been hiked to $665-670/mt FOB, up by $17.5/mt on average competed to late last week.