Prices for ex-Russia billet from the Black Sea region have risen further this week amid the uptrend seen in Turkey and expectations that firm scrap prices may provide support for billet in the near future. But overall trading is still limited and offer volumes from Russia have not improved much so far.
At the end of last week, a 10,000 mt deal from Russia was closed at slightly below $545/mt CFR, while another similar cargo was reportedly booked to another region of Turkey, though the price was not disclosed by the time of publication. But by the end of this week, Turkish buyers’ price idea for import billet has improved to $550-560/mt CFR, mainly on the back of the rising scrap prices and better domestic rebar sales. Still, taking into account the ongoing scarcity of offers from Russia, some suppliers prefer not to rush with sales and are evaluating the market. However, some of them note there is weaker interest in import billet for early February shipments.
Some rare offers for ex-Russia and ex-Donbass billet have been reported at $570-575/mt CFR and $550-560/mt CFR respectively for January production. Small cargoes for prompt shipments have been on offer from Russia at $585/mt CFR, though customers’ highest response to it has been at around $570/mt CFR.
“With scrap at, let’s say, $385/mt CFR and the rolling cost to billet at $210/mt or slightly above, and to rebar an additional $60-70/mt, billet imports are still better for the Turkish mills versus their own production,” a large trader said.
The SteelOrbis reference price for ex-Russia billet has been increased by $5-10/mt from yestereday and is up $15/mt week on week to $525/mt FOB Black Sea.
Along with ex-Russia billet, Turkey has been also receiving ex-Asia offers at $560-570/mt CFR with no interest seen yet due to the long lead time. Ex-Algeria billet offers have remained at $560/mt CFR, though there has been a lot of talk about a deal closed at $567/mt CFR for a decent cargo size. Many believe the price level is too high to be true, especially taking into consideration that the latest position cargoes from Algeria to traders were sold at $511-517/mt FOB and up to $525/mt FOB in some cases. With the average freight rates up to $27-30/mt for 20,000-30,000 mt, the CFR price to the end-user should not exceed $550-560/mt CFR levels including the average margin of the trader. Early this week, Algeria was targeting to sell at $530/mt FOB, while by the week’s end a bid at $535/mt FOB was turned down by the exporter. The most supplier's most recent targeted price is slightly above $545/mt FOB, SteelOrbis has learned.