Ex-Black Sea billet prices have retreated further this week due to lower bids from Turkey with still negative sentiment prevailing in the scrap segment and given slower demand in Egypt. The supply is still on the lower side, amid poor demand in the export market together with continuing sales in the local Russian market.
The SteelOrbis reference price for ex-Black Sea billet has declined again by $5-10/mt since late last week to $460-475/mt FOB, with the midpoint at $467.5/mt FOB. The lower end of the range, $460-465/mt FOB, is assessed by a number of market sources as workable for ex-Donbass or small volumes of ex-Russia billet, while the higher end represents mostly the mills’ lowest offers.
“[Local billet sales prices in South Russia are] almost $480-490/mt ex-works still. Large mills for 45-60 days delivery got bids at $450-460/mt ex-works,” a trader commented. Another source also confirmed that only domestic sales are seen now and export allocations from mills are limited.
In Turkey, the latest offers for small and medium volumes of ex-Russia and ex-Donbass billets have been reported at $490-500/mt CFR versus $500/mt CFR last week. Moreover, one deal has been rumoured at $485/mt CFR Karabuk, which translates to $460/mt FOB Black Sea at the highest. The deal could not be confirmed by the time of publication and has been denied by a few market sources. However, some assessed the level as “reasonable”. Most bids from Turkey are not above $480/mt CFR and are down as far as $470/mt CFR, which is $445-455/mt FOB for medium volumes at the highest.
Turkish buyers have been inactive in ex-Black Sea billet purchases and have kept their focus on negotiations in the local market, waiting for new deals for scrap. But one contract has been heard in the market done for ex-Malaysia duty-free billet at “below $520/mt CFR.” Though the price is on the lower side for the major exporters in Asia, who were resisting going below $490/mt FOB, it may be workable for duty-free origins for some buyers in Turkey, while offers have not been below $520-530/mt CFR.
In Egypt, the latest offers for ex-Black Sea billet have been reported at $520/mt CFR or just slightly below, while the previous deals around two weeks ago were at $530-540/mt CFR. After the last round of purchases, demand in Egypt has faded away.