Though there have been no changes in the scrap prices in the Turkish market, which usually leads ex-Russia billet trend, Russian suppliers have been under big pressure from increased competition with Asian billet exporters, cutting prices aggressively. Most Russian billet sellers have been trying to avoid lowering prices much, but the tradable levels have been inevitably softening.
The SteelOrbis daily reference price for ex-Russia billet has declined to $520-525/mt FOB with the midpoint at $522.5/mt FOB Black Sea, down by $5/mt on average from $520-535/mt FOB seen since last week. This decrease has been mainly based on lower tradable levels, while a number of firm offers have been limited.
The Turkish market, which has remained the major one for Russian sellers, has seen the increased number of billet offers from Asia as suppliers from China, ASEAN have been trying to accelerate sales, seeing weak performance in the regional market. Malaysian semis are officially priced at $560-565/mt CFR, but the large buyers believe the levels of around $550/mt CFR might be achievable for the decent order volumes. In the meantime, India and Indonesia are at $545/mt and $540-545/mt, both on the CFR basis. All offers are for end-June and July shipments. Earlier this week, ex-China billet offers have been reported at $540-550/mt CFR, while nowadays at least $10/mt lower levels are considered possible in back to back business. Some of the market sources have even reported $520-525/mt CFR and below levels, but these are considered to be traders shorting the market at “unnecessarily low levels.” "Considering the production cost from scrap and the problems caused to our rebar sales by the exchange rate and currency problems, I would believe none of the steel mills would look to buy above $530/mt CFR for the regular origins. For smaller lots and close shipments it might be different,” a Turkish steel producer told SteelOrbis.
Russian billet suppliers have been either stayed away from active offering or trying not to drop offers below $555-560/mt CFR Turkey (translating to $530/mt FOB) for June-July shipment. “For us even $550/mt CFR is low,” a Russian seller said. However, taking into account much lower offers from Asia and voiced buyers’ price ideas for ex-Russia material at not above $545/mt CFR (excluding prompt shipment), current offers seem too high for the current market.
In other sales destinations, like Africa, the competition has also been tough. According to market sources, the latest sales of ex-ASEAN billet to East Africa were done at $560-570/mt CFR.
In North Africa, some offers for ex-Russia billet have been reported at $550-560/mt CFR Tunisia, translating to $520-530/mt FOB, with no information about any deal signed. Some sources have reported about a few inquiries from traders for the Egyptian market with the target price at $545-550/mt CFR, which, however, has been too low for most suppliers in Russia. “The major issue is still if they have dollars to pay, this is limiting the trading for over a year already,” a Europe-based trader said.
Billet buyers from Latin America have not returned to purchases, seeing the falling prices. The latest price indication for Asian origins (Malaysia, China, India) has been at $570/mt CFR.
In the Asian import market, the Russian seller shipping from Far East ports sold billet at $510/mt CFR Taiwan last week, but after the further visible drop seen in China, market sources believe new buyers’ bids would be definitely at $500/mt CFR as the highest.