The still reduced billet availability from major CIS-based mills has been supporting offer prices. The trading activity for ex-CIS billet exports has dropped further as bids from key outlets have come down more.
Most major CIS-based mills have been offering billet at $415-425/mt FOB, with the price at the higher end of the range from the producer carrying out maintenance. “Mills don’t have an urgent need to sell. November shipment billet is 90 percent booked,” a source told SteelOrbis.
A contract for 20,000 mt has been concluded to Europe by a trader at around $410/mt FOB this week. A number of deals have been reportedly done over the past few weeks, lowering the pressure on steelmakers. In particular, around 90,000 mt of ex-CIS billet were booked to the UAE at around $410/mt FOB. Also, a contract for 50,000 mt of billet from a Ukrainian producer was closed to Qatar at around $420/mt FOB, which price, however, was more an exception. In addition, a Russian steelmaker sold more than 30,000 mt to Asia at the price of $410/mt FOB or so last week.
At the moment, bids from traders or some rare end-users in the MENA region are at $405/mt FOB maximum and some of them have already fallen to $395-400/mt FOB. Traders have started to test the Turkish market with offers at $420/mt CFR, which means they think that prices may go down further in the future. Lower scrap prices have also weighed on sentiment in the billet segment.
“I am pessimistic. The Russian longs market is not strong enough. Mills may go to the Asian side, facing low demand in the Middle East,” a trader said.
SteelOrbis’reference price for ex-CIS billet has declined slightly - by $2.5/mt on average to $405-410/mt FOB.