The ex-CIS billet trade has been quiet this week as a result of low demand in key outlets since some buyers recently restocked, while others are delaying their purchases due to high freight rates and the imbalance with scrap and rebar prices. The revival of interest in billet imports in China and climbing prices have not yet provided solid support for sellers from the Black Sea region.
The billet import market remains silent in Turkey since bids have dipped further and the high freight rates do not allow suppliers to sell at the prices which they consider valid at present. While CIS-based mills are still offering at $600-605/mt FOB, bids from Turkey are at $615-620/mt CFR, while freight is estimated at a minimum of $30-40/mt depending on the tonnage and the region. “We are not counting on Turkey today,” a producer told SteelOrbis. “It is below $590/mt FOB for us and there is not much point in selling small lots at this price since Turkey would not buy 30,000-50,000 mt cargoes anyway,” another source said. In the local market in Turkey, billet offers are at $620/mt ex-works Iskenderun, while Kardemir is expected to open its sales next week at a similar level.
Some CIS-based producers say demand from Latin America is quiet nowadays since buyers have restocked in recent weeks. They are expected to return in September with new demand and, according to some estimations, may generate up to 100,000 mt of billet demand.
China, where interest in import billet is being seen once again, is not yet considered as a way out for the Black Sea-based billet producers. Although the bids for 150 mm billets in China have increased to $690/mt CFR, the high freight rates are still restraining supplies from distant markets. “Freight to China today is $100-110/mt, so there is not much point in going there, for now at least,” a source said. Still, the development in China is considered to be a positive one and may open up some opportunities in the near future.
The SteelOrbis reference price for ex-CIS billet is at $600-605/mt FOB Black Sea, down by $2.5/mt from the previous level settled late last week.