Export prices for billet from major CIS-based steel mills have declined this week as scrap prices in Turkey have showed further negative corrections and suppliers in the CIS have had to adjust. But buyers have remained mainly quiet as they expect further developments, taking into account the still bearish sentiment in the raw material segment.
Billet export offer prices from major steel mills in the CIS have dropped to $580/mt FOB and slightly above. Some exporters from Russia have been able to discuss $570-575/mt FOB, according to sources. But no fresh deals have been reported so far this week. “Our position is to take all orders at above $580/mt FOB,” a Ukrainian producer said. “For us, the market is at $575-580/mt FOB, but no one wants to sell,” a Russian mill told SteelOrbis. The previous offers from large mills heard just early this week were at $590-610/mt FOB.
The number of firm offers has been limited not only from mills, but from traders as well, as only some of them have position cargoes. There was information about an offer from a trader at $590/mt CFR to Turkey, which corresponds to $575/mt on FOB basis.
But taking into account the negative moods in scrap and the uncertainty for the near future, market sources have said that the workable level for ex-CIS billet to Turkey will be at $560-565/mt FOB or even below, which translates to $575-580/mt CFR maximum. Sources are waiting for offers from small Russian mills or from eastern Ukraine at this lower level, but most sellers have not been ready to give below $570/mt FOB yet.
Buyers in other markets have also been mostly reluctant. A sale for a quick shipment to Tunisia has been reported at $610/mt CFR done last week (this translates to around $585/mt FOB), but “this price is not in the market anymore,” a source said.
Suppliers from the Black Sea region are not considering sales to Asia so far, as prices there are also under pressure. Billet offers from Russia’s Far East region are at $600/mt CFR to the Philippines, down by $5/mt from the sale last week, but with no takers as customers are all bidding close to $590/mt CFR.
The SteelOrbis reference price for ex-CIS billet has been settled at $570-580/mt FOB Black Sea as no deals have been reported so far, stable over the day, but down by $12.5/mt from January 19 and down $22.5/mt since last Friday, January 15.
