Russian billet suppliers have started to target higher prices after the recent rebound seen in the local billet market in Turkey and the fairly fast increases seen in scrap prices. The overall offer volume from Russia is still limited given the lack of vessels at some ports.
Since yesterday, November 29, some offers from Russian suppliers have been reported at $530/mt CFR for shipping from Novorosiysk, which translates to $495/mt FOB for small volumes and $500/mt FOB for bigger volumes. Moreover, a deal for either ex-Russia or ex-Donbass billet has been rumored at $535/mt CFR Izmir. Though this information has not been confirmed by the time of publication, a number of sources believe that it is quite possible as the sentiments in the Turkish market have improved significantly. This price level is $20/mt above the latest reported deal a week ago. Though the volume in the deal is also unknown by the time of publication, it is expected to be not so big at 10,000 mt or below. With the current reduced freight rates from Novorosiysk to Turkey at $30-35/mt, the FOB price would be $500-505/mt FOB. Some sources have increased offers for prompt-shipment cargoes to $560-565/mt CFR Turkey, but this level mainly represents positive expectations rather than the current real market levels.
The competition with ex-Far East billet has continued with new offers from this region to Turkey reported at $535/mt CFR too, but, since the offers from Asia are just for January shipment and the lead times are too long, there have been no new deals heard for Turkey.
Market sources are not very confident that the uptrend will last long. “I think it will be short-lived. It is still difficult to sell finished products. They [Turkish mills] will buy the minimum [of the import scrap] that they need and then will go back,” the European trader said. “Kardemir has sold not such a big quantity,” another trader said, pointing out that, though prices are on the rise, demand is not that good.
However, “there is still limited supply from the Black Sea and we are just expecting higher ex-Donbass offer volumes in the near future,” another trader commented.
The SteelOrbis reference price for ex-Russia billet has increased to $495-505/mt FOB with the midpoint at $500/mt FOB Black Sea, up by $2.5/mt from the previous day and up $15/mt since late last week.