Prices for billet from Russia’s Black Sea region have improved slightly this week, but mainly owing to some deals and more inquiries from North Africa, from Egypt in particular. At the same time, the situation in Turkey is still not supportive, even though scrap prices have inched up from yesterday, March 13.
The SteelOrbis reference price for ex-Russia Black Sea billet has settled at $495-515/mt FOB with the midpoint at $505/mt FOB, up by $6/mt on average from late last week. The lower end of the range still represents the weak bids from Turkey, while the levels at $510-515/mt FOB may be accepted in North Africa with some specific conditions.
In particular, a few lots of 10,000 mt of ex-Russia billet for prompt shipment have changed hands at $517/mt FOB Black Sea and it has been heard that the material is for the Egyptian market. The high price is explained by the short lead time, while for April shipment the highest price possible has been assessed by market sources at $510/mt FOB. Also, inquiries for up to 30,000 mt from North Africa have been heard this week. “The Turks want cheap billets, but it seems they hve failed to find them so far,” a market source commented, saying that Russian suppliers are focused more on North Africa now.
The latest deal from a trader in the Egyptian market for an old position cargo has been done at $555/mt CFR Egypt. A recent sale for prompt shipment from Russia has also been assessed at near $550-555/mt on CFR basis. However, buyers are still bidding lower for April shipment, and a lot depends on the volume and grades. The tradable levels for April shipment are said to be $540-545/mt CFR.
Turkey’s import billet market has once again shown limited activity given the relative uncertainty in the import scrap market, and a lack of semis offers versus quite low bids placed by the Turkish buyers. Some rare offers for ex-Donbass material have been reported at $520/mt CFR for end-of-March and April shipments, versus bids at $500-510/mt CFR. A Russian cargo for prompt shipment has been on offer at $540-542/mt CFR to the northern part of Turkey, with no sales done yet. Asian billet, namely from Malaysia, Indonesia and China, has still been offered by traders at last week's levels of $540-545/mt CFR. Ex-Ukraine billet, according to sources, has also been offered to Turkey at around the same level. “In the current market conditions, I think some Turkish buyers might accept $540/mt or slightly lower for Malaysian or Ukrainian cargoes, unless scrap prices resume falling,” a source told SteelOrbis.
The limited billet availability from Russia is also due to some developments in its domestic market. According to sources, longs consumption has increased due to seasonality, while local scrap prices have started to increase, particularly in the Southern Federal district. In such a circumstance, market players expect a further increase of local billet prices in Russia. Even before the anticipated increase, local prices in Russia are at a minimum of $500-510/mt ex-works, which with added transportation cost to ports is already much higher than the equivalent Turkey is ready to pay nowadays.
