Though most ex-Black Sea suppliers are still not active in offering billet to the export markets after the introduction of the export tax in Russia, which is currently at seven percent, the tradable level has softened despite their expectations of an increase. The bearish mood in Turkey amid softening scrap prices and more sales of ex-Algeria billet to Turkey and North Africa have been impacting ex-Black Sea billet prices.
The SteelOrbis reference price for ex-Russia billet has declined by $5/mt to $470-475/mt FOB Black Sea, even though some mills are still voicing offers at $480-490/mt FOB. Mills that have been targeting $500/mt FOB are mainly out of the export market as this level is not considered possible any time soon.
Among the rare deals, a sale of 2,000 mt of Russian billet for prompt shipment was done late last week at $515/mt CFR Aliaga. However, for November shipment material, buyers in Turkey have not been ready to pay above $500/mt CFR and some bids have been reported even at far below this level. “We are not interested in sales at such levels,” one of the traders of Russian billet said. “CIS billets can be bought at $505/mt CFR now. For lower levels, we have to wait a little more,” a Turkish mill commented.
The lowest indicative offers have been heard for ex-Donbass billets at around $500/mt CFR to Turkey, with no deals reported yet. “We waited for an increase of up to seven percent for billet [after the introduction of the export duty], but have seen no increase at all. Trading is almost absent,” another trader said.
Trading of billet of alternative “clean” origins has been more active than trading in the Black Sea market. For instance, in addition to a deal for ex-Algeria billet at $516/mt CFR reported last week, two other contracts for the same origin have been done for 10,000 mt and 30,000 mt. The first one was transacted at around $515-517/mt CFR Iskenderun, while, though some sources said that the second deal was closed at $516-520/mt CFR Izmir, a few more sources said that this deal to Izmir was at $508/mt CFR for a cargo purchased from the Algerian mill by a trader back in August. Moreover, at least one deal for ex-Algeria billet has been rumoured to North Africa at slightly above $525/mt CFR, though this information has not been confirmed by the time of publication.
Billets of other origins are more expensive in Turkey. An offer for duty-free ex-EU billet has been heard at $550/mt CFR, while the ex-Malaysia indicative price level is slightly lower, at $535-540/mt CFR.