The lack of allocation of ex-CIS billet in the export market has led to a further price increase by the major mills. Moreover, stronger scrap prices in Turkey have pushed up bids for imported billet in the country. Demand for ex-CIS billet from other sales destination has remained limited.
Most offers from CIS-based mills have been at $385-390/mt FOB for September shipment and some mills have increased their asking prices up to $400-405/mt FOB, which is not reflecting the situation in the market and shows that the suppliers are not in hurry to sell. “There are simply no volumes,” one source said. A few big mills claimed they are fully booked until the end of September shipment. “We are asking at $390/mt FOB and above, but no buyers at this level. No one wants to sell [billet on exports] at lower prices as the local market [for longs in Russia] is very good,” a Russian seller said.
The workable level and SteelOrbis’ reference price have increased from $370-375/mt FOB to $380-385/mt FOB, taking into account higher offers from exporters and improved bids mainly in Turkey.
In Turkey, several small lots of ex-CIS billet have been booked at $400-403/mt CFR and slightly below, up from $382-388/mt CFR range fixed in the last week’s sales. As a result, the workable level for relatively prompt shipments is around $385/mt FOB, SteelOrbis understands.
After the deal closed last week at $402/mt CFR, some talks have been underway in Saudi Arabia. An offer at $418/mt CFR has been reported this week for a large cargo, back to $385-387/mt FOB, SteelOrbis estimates. No deals have been reported as the buyer decided to wait, sources say.
In North Africa, offers have been heard at $415/mt CFR to Egypt and $420/mt CFR to Algeria, both corresponding to around $390/mt FOB and slightly above.
In China, the latest deal for 25,000 mt of 125 mm billet from Russia’s Far East was signed at $412/mt CFR. Offers from the same region have been at $420/mt CFR, while the asking price from the Black Sea region is not below $425/mt CFR China, which translates to $380/mt FOB or slightly above, depending on the freight.
