Following a lull of a few week in import business, Egyptian buyers have returned to the market to restock and just in time to provide the needed support for ex-CIS billet pricing.
Starting from the end of last week, CIS-based billet producers have been receiving a number of inquiries from Egypt and have managed to closed deals for some significant volumes. According to sources, the purchases started with a sales of about 30,000-40,000 mt from Russia at around $610/mt FOB, followed by medium-sized deals from Ukraine within the $615-620/mt FOB range. Given that purchases are continuing and that negotiations with Egyptian buyers are still on the table, it is considered possible that higher levels will be accepted in the coming contracts. It is worth mentioning that ex-CIS billet is expected to be chosen over Turkish billet, the prices for which have increased to $670-680/mt FOB from several mills.
The current freight to Egypt from the CIS is estimated at $35/mt on average and in some cases slightly higher, while from Turkey billet cargoes can be shipped at a cost of $20-25/mt, sources estimate.
For now, the market sources find it difficult to estimate the total tonnage booked so far by Egyptian buyers. According to different evaluation, CIS-based mills may have sold up to 100,000 mt of square billet to Egypt so far.
As a result, the uptrend, started by some improvements seen in the Turkish market, has been supported by the appetite for import billet seen in Egypt. “They have bought a lot [of billet] after the holidays, starting from last week. So, prices have definitely increased,” another source said. The SteelOrbis reference price for ex-CIS billet has increased by $10/mt since yesterday to $615-620/mt FOB, with the midpoint at $617.5/mt FOB, and up $15-20/mt since last week.
