Offers from the major CIS-based billet exporters have increased by the end of this week. The sentiment has been supported by the earlier boost from China and, though prices there have stopped rising by the end of the week, most suppliers from the Black Sea region have remained optimistic, expecting sales at higher prices to other outlets, and to Latin America in particular.
The latest offers from the large CIS-based mills have been reported at $600-610/mt FOB, up from $590/mt FOB earlier this week. “Steel mills are aiming for $600/mt FOB and even the absence of Turkey [as the sale destination] cannot hurt,” a source said.
The tradable level has been assessed by most market sources at not below $580/mt FOB. Last week, a deal for ex-CIS billet was done to North Africa at $610/mt CFR, which translates to $575/mt FOB. New deals are expected to East Africa in the coming week or two.
But the main support is expected to come from Latin America. According to sources, there are inquiries for up to 120,000 mt of billet from this region in total. “Brazil, Colombia and the Dominican Republic are in the market,” a trader said. “New deals are expected very soon. But, if early this week the target price was $580/mt FOB, now it is higher,” another source said. Also, there are reports that the freight to Latin America is lower than to China, which could be an advantage.
There have been no reports about new deals from the Black Sea to China after an earlier reported rumour about a sale from Ukraine at $650/mt CFR. At the moment, following a few days of futures losses and stabilization of local billet prices, bids from China are at $645-650/mt CFR, which corresponds to $580-590/mt FOB. But demand has eased significantly by Friday.
The Turkish market has been out of the scope of interest of CIS-based exporters, as Turkish bids are at $580/mt CFR and below at the moment.
The SteelOrbis reference price for ex-CIS billet has been increased by $10/mt to $585/mt FOB Black Sea.