This week prices for ex-CIS billet from the Black Sea region have decreased as the sentiment in Turkey has become even more bearish and low-priced position cargoes from traders have been available. While some CIS-based mills have decided to just slightly reduce prices or even to withdraw offers as they have been not competitive, producers have had to cut prices visibly to attract customers.
The sentiment in the Turkish billet market has been much weaker as, with an increased number of offers from traders - mainly at $660-680/mt CFR for Indian and Middle Eastern origin billets - buyers have become more cautious. According to the information circulating in the market, one lot of 30,000 mt of position billet has been sold to Turkey at $670/mt CFR, but this has not been confirmed by the buyer. A number of sources said that most customers have not been giving any bids in the current falling market.
In these conditions, ex-CIS billet prices have been under strong pressure. In particular, ex-Ukraine billet has been sold to Turkey at $660/mt CFR. The freight from the Black Sea to Turkey has been assessed at around $35-40/mt, so the FOB level in this deal has been at around $620-625/mt FOB.
“Most mills were offering at $650-660/mt FOB, but our clients demand $620-630/mt FOB,” a Russian billet supplier said, adding that the new offers from Russia will be more active for January shipment due to expiry of the export duty of $115/mt.
Weak sentiment in the Asian market has also put pressure on ex-CIS billet prices as there is no expectation for a demand revival in China in the short term with bids at $630-640/mt CFR at the highest. In Southeast Asia, the market has also been full of position cargoes offered at $660-675/mt CFR. One of the mills from Russia’s Far East region has been offering at $685/mt CFR to the Philippines with no takers.
Despite the recent drop, some CIS-based suppliers are not losing their optimism and believe that the downtrend will end by the middle of the month and that in late November some rebound will be seen in the market again. In such conditions, offers at below $650/mt FOB Black Sea are rare and some mills are staying out of the market for now. There has also been information about a sale of billet to Cental America from the CIS at a higher price level early this week.
The SteelObris reference price for ex-CIS billet has been corrected down to $620-650/mt FOB Black Sea with the midpoint at $635/mt FOB, which is $15/mt below the level on November 3 and down by $22.5/mt from late last week.
