Demand for ex-CIS billet still weak

Over the past two weeks, ex-CIS billet offers to the export markets have decreased by $10/mt on average to $310-325/mt FOB. Besides the slackness of demand for billet exports from the CIS region, the downtrend of Chinese billet offers which began in early September has also played a role in the decreasing trend of ex-CIS billet prices. In Egypt, one of the most important markets for CIS-based suppliers, billet demand is still weak and the problem of tightness of foreign exchange availability in the country still exists. Meanwhile, in Turkey, another target market for CIS-based suppliers, import scrap prices have been moving downwards since mid-August and Turkish buyers consider ex-CIS billet offers to be on the high side, with buyers in Turkey are still purchasing import scrap instead of billet as billet quotations are not attractive enough to ensure a cost advantage in finished steel production. Turkish buyers are expected to continue to book scrap instead of billet and so demand for ex-CIS billet in Turkey is unlikely to recover in the short term if prices of scrap and billet remain at their current levels.