CIS billet exporters have been holding their prices firm this week, even though demand has been relatively weak and scrap prices in Turkey have shown some declines. Active previous bookings and good outlook for distant markets’ demand have supported moods in the CIS.
Offers from the major CIS-based mills have been reported from $660-665/mt FOB, which have been called “closer to the real market level”, to $670-675/mt FOB Black Sea.
After a week-long holidays, Turkish market players have started to return, but demand has been close to zero so far. “The market is silent,” a trader said, as despite expectations Kardemir has not opened its billet sales today and there are no fresh inquiries. Moreover, import scrap prices have declined by $5/mt after the holidays to $475/mt CFR with most sentiments bearish at the moment.
Nevertheless, CIS billet sellers are not in hurry to cut prices. “Billet is not in oversupply in Black Sea at the moment… So even if scrap is down, the billet segment is balanced, so no one [among large billet suppliers] wants to go synchronically with scrap,” one of the producers said.
Despite weaker sentiment in Turkey, the situation in distant markets like China has been still good. Bid prices have increased to $720/mt CFR generally in China, while one deal for ex-ASEAN billet has been closed at $725/mt CFR. This is up from $710-720/mt CFR tradable level last week. At the moment most large suppliers are asking for $725-730/mt CFR and even above. But as the local market in China has stabilized a bit, buyers are not willing to accept higher prices too fast. The $720-725/mt CFR China price level is equivalent to around $650-655/mt FOB Black Sea or lower, depending on the freight. Last week the highest possible level that could be accepted in China from Black Sea was $645/mt FOB. Suppliers from Black Sea are not in a hurry to sell to China now as they either don’t have large unsold volumes, or still think that prices in China still have some space to improve.
After sales of 80,000 mt in total of ex-Ukraine billet to Latin America no new bookings have been heard to this destination, but sources said that it will be very hard to find a price at below $660/mt FOB at the moment.
A contract for ex-CIS billet has been closed at $660/mt FOB during the week with the sale market is heard to be Africa.
The SteelOrbis reference price for ex-CIS billet has increased by $7.5/mt from $645-650/mt FOB late last week to $650-660/mt FOB.