CIS billet export prices have moved down again this week due to the sharp drop in scrap prices in Turkey. Moreover, demand in major sales destinations has remained subdued and as a result most suppliers have not been able to close their September order books. Most market participants have assessed workable prices levels for ex-CIS billet at $370-375/mt FOB, which is $8-10/mt below late last week’s level, SteelOrbis is informed. A deal for 10,000 mt from a tier-one supplier has been closed at $372/mt FOB to a customer in Tunisia. As SteelOrbis reported earlier, a previous contact from the same mill was signed at $378/mt FOB. Some small transactions of ex-CIS billets to Egypt were signed at $380-385/mt FOB last week, but “there have been no activity at all this week,” a trader said.
Major mills have been refusing to give firm offers in the current conditions. “Mills prefer to collect bids. I am very pessimistic for the future,” a trader told SteelOrbis. After the recent ex-US scrap price drop of $12/mt, Turkish buyers have been saying that the billet price should decrease to $360-365/mt FOB. Moreover, an additional $10/mt scrap price decline is expected.
Though some major billet exporters in the CIS have said that they are not ready to give $370-375/mt FOB in offers at the moment and are insisting on $380/mt FOB and above, the main concern is the available unsold volumes for September production.
Offers for billets from the Black Sea have been heard at $420-425/mt CFR in Southeast Asia, which corresponds to $375-385/mt FOB, but there are no buyers for big volumes as traditionally to get low freight rates the suppliers need to sell cargoes of 40,000-50,000 mt. “The market is falling every week. I think it has already been possible to get $415/mt CFR, but no deals have been done,” an Indonesian buyer said. The last deals for Russian billets from Far East ports have been concluded at $425/mt CFR Philippines and buyers’ price idea has already slipped to $420/mt CFR.
