Negative sentiments have continued to prevail in the ex-Black Sea billet market this week as scrap prices have been retreating further and demand from Turkey has been limited. Nevertheless, overall allocation of billet offered from Russia is reduced as some mills are not ready to provide the much lower levels asked by international buyers, as they can increase finished steel sales in the local Russian market where prices are stronger.
The SteelOrbis reference price for ex-Russia billet has been at $435-440/mt FOB Black Sea, down by $7.5/mt on average from yesterday and down from the level seen late last week. This price reflects a few deals concluded to Turkey and Egypt recently, though offers have remained at slightly higher levels of $445-450/mt FOB for August shipment.
This week, a few small sales of ex-Black Sea billet of 3,000 mt each have been reported as having been done to Turkey at $465/mt CFR, declining from the majority of offers at $470-475/mt CFR last week from both Russia and Donbass. This price translates to $435-440/mt FOB. “The last deal was at $465/mt CFR. New deals were maybe signed a little lower, but there is no confirmed lower level yet. It seems that we are very close to the bottom,” a Turkish mill said.
A few suppliers have been offering at $468-475/mt CFR or around $450/mt FOB Black Sea to Turkey this week, “but the Turks will not buy at this price. Bids have dropped to $450-455/mt CFR, but they [buyers] will not get this from anyone,” a trader said. Overall, there have been reduced allocations of ex-Black Sea billet in the Turkish market as prices have dropped so much, becoming entirely unattractive for producers. “The local Russian steel market is way better, frankly speaking. The rebar price is at $630/mt [delivered]. We can sell billet at over $500/mt,” a seller of Russian billet said.
Apart from small sales to Turkey, there has been information about 30,000 mt of ex-Russia billet sold to Egypt at $440/mt FOB, which translates to around $470-480/mt CFR. And though this level is lower than traders’ offers reported for material at ports at $490/mt CFR, there has been no confirmation of this deal by the time of publication.
Ex-Black Sea billet prices are translating to $480-490/mt CFR Asia and, though no deals have been confirmed by now, some sources said that negotiations are still in place.