Although CIS-based billet producers are trying to raise their export prices due to the influence of higher scrap costs, trading companies in particular are offering significantly lower billet export prices to the international markets as compared to CIS-based producers.
CIS-based mills’ billet export offers are at $460-465/mt FOB for May deliveries as they are struggling with high scrap prices resulting from the tightness of scrap supply, while CIS-based trading companies’ offers in the spot market are at $445-455/mt FOB.
Although billet demand in the international markets is slightly stronger compared to rebar demand, it is noteworthy that buyers are exerting pressure on billet quotations. Iranian mills, which in particular have a production cost advantage, are offering significantly low billet prices to the global market at $400/mt FOB due to the impact of the ongoing sanctions on Iran. This has caused international buyers to increase the downward pressure they are exerting on billet offers from the CIS region.
Ex-CIS billet offers at $475-480/mt CFR are heard in Turkey - one of the CIS-based suppliers’ main billet export markets - while finished steel demand in Turkey is at very low levels under the current circumstance as Turkish buyers cannot predict the price trend for the period after the upcoming local elections to be held on March 31. As a result, it is believed that the current ex-CIS billet offers are not acceptable in Turkey at present.