Weaker prices for billet in Turkey and the still not very positive situation in the Chinese market have put additional pressure on ex-CIS billet prices by the end of this week.
Though official offers from Ukraine have remained at $670/mt FOB Black Sea or just slightly below, most major sellers have been considering $645/mt FOB as a tradable level in the current weak demand conditions. According to sources, in the middle of this week 15,000 mt of ex-Ukraine billet have been traded to Libya at $690/mt CFR, which is around $645/mt FOB for base grade, sources have said. Some inquiries are still heard from Ethiopia, but no new deals have been reported so far.
In Turkey, the price idea of the buyers has decreased as compared to earlier this week. One reason is that an Iskenderun region-based mill has recently sold 30,000 mt at $660/mt ex-works, which is lower than CIS-based mills’ expectation, which were mainly at $670-675/mt CFR. In addition, the offers for the eastern Ukraine origin billet are reported at $645-650/mt CFR Bartin, creating difficulties for the business for other sellers. “It is lower than anyone in the CIS is willing to sell at, especially with today’s freight rates,” a trader told SteelOrbis.
It is worth mentioning that some sources report there is some confusion at the Russian customs, specifically in the southern region of the country. Some sellers say they have issues with the 15 percent (or minimum $115/mt) duty payment which is required, although the declaration of the cargoes dates back to July. “We have vessels waiting for the seventh day now, all customs were cleared by July, and they are being held illegally by customs with no official reply,” a source said.
In China, today local billet prices in Tangshan have dropped by another RMB 50/mt ($7.7/mt) after the slight increase in the previous day, to RMB 5,080/mt ($786/mt) ex-works, signalling still weak sentiments. This price level corresponds to $696/mt excluding 13 percent VAT. If considering the higher freight for ex-CIS billet from the Black Sea to China at $80-90/mt, the tradable price to China hardly exceeds $610/mt FOB Black Sea, far below what sellers may offer.
The SteelOrbis reference price for ex-CIS billet has been lowered by another $5/mt today, August 6, to $645/mt FOB.
