Prices for ex-CIS billet have increased further this week, following a number of deals done at higher levels to different outlets - to Latin America and Turkey in particular. Given that sentiment is bullish in the scrap segment in Turkey, CIS-based suppliers will keep insisting on higher prices, but higher freight rates have become a disadvantage for exporters.
Last week, there were two to three deals done to Latin America from Ukraine. One of them was for 30,000 mt to the Dominican Republic at about $550/mt FOB base. Another one for a higher volume of up to 45,000 mt was rumoured to Peru at a slightly higher level, at about $555-560/mt FOB, but the final price level could not be confirmed by the time of publication. These price levels are not considered as workable any more, as contracts at higher prices have already been reported.
In the Turkish market, certain interest has been seen for ex-CIS billet, given the uptrend in scrap prices and the generally positive mood, at least for now. A 10,000 mt lot was traded earlier this month at $580/mt CFR, netting back to around $560-565/mt FOB. However, the cargo is said to have been sold for March shipment. According to the latest information discussed in the market, a similar volume has been recently sold at $588/mt CFR with details unknown for now. The freight to Turkey is currently estimated at $15-25/mt minimum depending on the region. In the meantime, some sources assume the deal was for wire rod grade billet, which implies some additional extras. Nevertheless, most market players agree that $590/mt CFR may soon be reached in deals to Turkey, though for some medium-sized lots for now. “Scrap is still far better for steel producers unless it surges. And rebar prices are good enough for decent margins,” a trader told SteelOrbis. It is also worth mentioning that the suppliers of small lots ex-Rostov are back in the market after a long break with $605/mt CFR offers for prompt shipments.
The recent offers from the major CIS-based mills have been reported at not below $570-575/mt FOB, which could be accepted in Turkey soon. Some mills may still consider selling at slightly lower levels of $560-565/mt FOB, but only for small tonnages.
The SteelOrbis reference price for ex-CIS billet has increased by $5/mt since yesterday, February 22, and by $10-15/mt since late last week to $560-565/mt FOB.