Slow demand has continued to put pressure on ex-CIS billet prices this week. Most suppliers have been forced to cut prices and, though some negotiations are underway, market sources believe that prices will keep sliding in the coming week.
Official offers from major mills from the CIS have decreased to $645-650/mt FOB Black Sea, while last week offers were mainly at $660-670/mt FOB. Sellers have lowered prices to more realistic levels, as demand from a few large outlets has deteriorated further. At the moment, mills consider the tradable price level to be $640/mt FOB, SteelOrbis has learned.
Negotiations for ex-CIS billet have been in place in Latin America, in Guatemala in particular, but there has been no confirmation of any deal being signed by the time of publication.
“I don’t see activity in the market. Europe and the Middle East are absent,” a trader said.
Also, surging freight rates have meant that China is not an option for Black Sea-based billet suppliers. One offer has been heard at $740/mt CFR to China this week, which is far below most bids, which have slipped to $690/mt CFR by the end of this week. The freight from the Black Sea to China has increased to $90/mt minimum for large volumes like 50,000 mt and above, while some traders said that for 20,000-30,000 mt freight could be up to $120-125/mt.
Falling rebar prices and weak sentiment in the scrap segment has made import billet buyers in Turkey reluctant to buy ex-CIS material. The freight from the CIS to Turkey has surged to $30-40/mt, and so even $640/mt FOB, possible from large exporters, would translate to $670/mt CFR minimum, while in the local market prices have already come down to $650-665/mt ex-works.
The SteelOrbis reference price for ex-CIS billet has declined by $5/mt this week, to $635-645/mt FOB.