The situation in the CIS billet export market has remained difficult as firm demand has been seen only from China and bids have been going down, forcing mills to cut prices.
A deal for ex-Ukraine billet at $365/mt CFR China has been widely discussed in the market recently. Though the seller and a few major buyers have not confirmed that it has been done, most of them believe that the price level corresponds to the real market level which exporters may give if they want to sell. The freight rate from the Black Sea to China is assessed at $30-35/mt and, as a result, the SteelOrbis reference price for ex-CIS billet has been set at $330-335/mt FOB. This is down $5-10/mt from yesterday, March 30, and down 10/mt compared to the price level late last week.
Last week, a booking of 40,000 mt of ex-Russia billet from the Black Sea region was concluded at $370-375/mt CFR (about $340/mt FOB).
The price level has been lower in every next round of buying in China and at the moment “Chinese customers are testing the market every day and they are trying to push prices to $360/mt CFR,” one of the CIS sellers said. Moreover, traders have said that bids from some importers have already slipped to $350/mt CFR.
There have been a lack of offers from CIS-based mills elsewhere except China, sources said. Those mills, which still have April shipment materials, can offer as low as $330/mt FOB. Most CIS-based mills have decided to stop giving official offers and have been only collecting bids. “I suppose CIS suppliers will start to cut production soon,” a trader said. Some inquiries for ex-CIS billet may come from Saudi Arabia in the near future, but customers are only considering import purchases at the moment.
In Russia’s Far East sellers have also been mostly focused on sales to China, with the latest booking at $370/mt CFR early last week.