Following the recent slight decline in scrap prices in Turkey, sentiments in the ex-Russia billet segment have also worsened after a short-lived improvement. Moreover, the continuing increase in freight rates for shipments from the Black Sea and the Azov Sea for September has been impacting FOB prices even harder, SteelOrbis has learned from the market.
The SteelOrbis reference price for ex-Russia billet has lost $10/mt since last week, coming to $445-450/mt FOB Black Sea.
This decline has been mainly due to the continued increase in freights. For instance, for 10,000-15,000 mt lots of billet the freight from Novorossiysk to the Marmara region will be $25/mt at the lowest, while to Iskenderun the freight can be up to $38/mt. For smaller lots of about 3,000 mt from Rostov port, freight has hit and already exceeded $50/mt since, apart from the start of the grain season, the higher risks connected with the endangered Crimea bridge have added to the situation. As for prompt shipments for August, freights are still lower as “the busy grain season has not started yet”, with $18-28/mt rates for 5,000 mt lots, depending on the arrival area in Turkey.
The recent FOB reference price translates to $475-485/mt CFR Turkey at the lowest for medium-sized cargoes. A few suppliers offering Russian and ex-Donbass material are still voicing $500/mt CFR, which is totally unworkable in the current market conditions. Suppliers are mainly stepping back from active negotiations, trying to evaluate the market.
The prompt shipment offers are still reported at $505/mt CFR. “Kardemir’s rebar prices are at $595/mt ex-works. This means $535/mt for [local] billet,” a source said, explaining that some small buyers may choose to pay still higher prices for ex-Russia billet for prompt shipment.