CIS-based billet sellers have largely maintained their price positions in exports, supported by strong scrap prices and by the demand coming from several markets. This week, the mills have increased their activity in nearby destinations, with some sales done. However, the producers’ focus has remained on the active Chinese market.
Turkey has been rather active in billet negotiations this week, with most offers coming mainly at around $390/mt CFR and above. Local sources consider that $380/mt CFR would be accepted almost immediately, while the level of $385/mt CFR and above would be paid by few, while above $390/mt CFR would probably not make much sense for buyers unless there is some improvement on the rebar side. As a result, CIS-based mills are targeting $375/mt FOB to Turkey, while the buyers’ idea is generally $5-10/mt lower. However, a 20,000 mt cargo of wire rod grade billet has recently been booked from Ukraine at $372/mt FOB, SteelOrbis has learned. It is said that in this particular case there is no grade extra applied.
Some talks have been reported with North African countries and some market sources expect deals to be disclosed shortly. Both large Algerian mills are in the market to test offers and some indicative levels have been at $405/mt CFR, while similar levels have been voiced in Morocco, SteelOrbis has learned. All these offers are equivalent to $375/mt FOB, while negotiations continue. However, some sellers see more potential in deals to East Africa, with no details in terms of offers or sales disclosed just yet.
Some activity has been seen in the Gulf Cooperation Council (GCC) region. Offers to Saudi Arabia this week have reached $380/mt FOB from the CIS. According to market sources, one buyer has booked close to 50,000 mt within $370-375/mt FOB, but the details have not been disclosed by the time of publication. Interest from Oman and the UAE in ex-CIS billet has been low, mainly as buyers have preferred to restock with products of local and Indian origin. Indicative offers from the CIS are estimated at $415-417/mt CFR UAE, while there is information about a 20,000 mt ex-India sale at $398/mt CFR. Moreover, while Asian markets are active, the GCC mills, in Oman in particular, have been focusing on their own export billet sales.
While the MENA region has shown some recovery in terms of demand, China remains the focus of CIS-based mills despite the increased freights as it is able to absorb large lots. According to sources, a large cargo from Ukraine has been sold to China at $413/mt CFR recently. The freight from the Black Sea to China was at $40/mt, but a number of sources confirmed that it has increased up to $45/mt. As a result, this deal translates to around $370/mt FOB. On Thursday, July 16, there has been a rumour in the market about two lots from Russia being traded at $420/mt CFR China, but this information has been denied by most sources in China and the CIS so far. “I do not see the market price level above $415/mt CFR China now,” one of the sources said. “Suppliers from the Black Sea are more or less quiet in Asia now due to higher freights,” another source said.
The SteelOrbis daily reference price has remained at $370-375/mt FOB.