Prices for ex-CIS billet have been under pressure early this week as demand has not improved and negative moods have still persisted in the scrap segment. Most CIS-based mills are optimistic for the near future, seeing that billet prices are close to the bottom and hoping they will rebound, but the trend will not change until new bookings have resumed, market sources have told SteelOrbis.
The lowest billet offers from the Black Sea region from some EAF-based CIS suppliers have been heard at $570/mt FOB, though most of the producers are still insisting on $580-585/mt FOB. The most optimistic mills from Russia have been officially asking for $600/mt FOB or even above, as they believe the market will rebound soon. However, in the current market conditions, when buyers’ resistance is still strong, the trend cannot reverse so far.
The workable price level for customers, for Turkey in particular, is $565/mt FOB or below, far from sellers’ expectations. “We hope for a price increase and for prices coming back to $580/mt FOB as no one wants to sell at $560-565/mt FOB,” a CIS-based supplier said. But “there is no taker and, with current lira exchange rate, I doubt that we will see it [rebound] now,” a trader said.
No deals have been heard to Africa or Latin America as most market sources are watching the market and expect the next move in the scrap market where sentiment has not improved yet.
In China, the tradable level for import billet has increased this week, following the local price surge. Bids for ex-CIS billet are at $605-610/mt CFR for now, up from $595-600/mt CFR last week. But taking into account the huge freight costs, sales are possible only from Russia’s Far East region, not from the Black Sea, sources believe.
The SteelOrbis reference price for export CIS billet has been lowered by $3.5/mt since late last week to $565-570/mt FOB Black Sea, with $567.5/mt FOB as a midpoint.