Prices for ex-Russia billet have declined further due to the very limited number of takers left, who can purchase ex-Russia material and risk receiving cargoes from the Black Sea. Payment issues and problems connected with deliveries of products, including insurance, as well as reputational risks have been keeping most buyers away, though there is information that one of the large Turkish mills has purchased a lot of Russian billet recently.
Offers from Russia have fallen to $790/mt FOB Black Sea, down by $10-20/mt reported a week ago. This level has already been fixed in deals and even lower prices are available in negotiations.
There is information that a large Turkish mill located in the Samsun region has purchased 18,000 mt of Russian billet at $830/mt CFR on average, SteelOrbis has heard from the market. The deal was probably done due to low prices to increase profits as the difference between export and ex-Russia import prices in Turkey exceeded $50/mt.
A trader, Amesco, was heard offering ex-Russia billet down to $820/mt CFR Turkey lately, one source said. While another added that this level is more reasonable for Russian material given the low demand and high risks for buyers.
The freight from Russian Black Sea ports to Turkey is $35-40/mt at the lowest and up to $50-60/mt. “These all should be intra-Black Sea shipments from Russia now,” a trader said, as there are no customers outside of this region ready to take risks to accept Russian cargoes, at least for now. Sources also point out that there are limited insurance companies ready to serve ex-Russia shipments. “Freight remains a disaster,” a source added.
In terms of payments, all deals for ex-Russia billet heard recently were for cash upon arrival. “Egypt [most of the buyers there] will not open LCs for Russian billet,” a source said. Another market participant also said that though there are plenty of offers for ex-Russia material, they are “for the same material, which they couldn’t sell.”
Ex-Russia billet prices are now at a big discount compared to billet of any other origins in the region. For instance, the tradable level for ex-Asia billet in North Africa, in Egypt in particular, could be $870/mt CFR, while offers are still at around $900/mt CFR. In terms of Asian billets, suppliers from Indonesia and Vietnam are likely to stay active in offering, while Chinese sellers are likely to withdraw due to the expectations of export duty again.
In other distant destinations, the substitutes for ex-CIS billets are expected to be Turkish and again Asian billet. The last deal for ex-Turkey billet, 40,000 mt, was done at $885-890/mt FOB, as SteelOrbis reported earlier.
The SteelOrbis reference price for ex-Russia billet has been lowered to $780-790/mt FOB, down by $10/mt on average from $780-810/mt FOB Black Sea last week.