Prices for ex-Russia billet have been under strong pressure this week, following a number of scrap deals done at ever lower levels and as bids for billets have been plunging. As a result of the significant drop in tradable levels for billets from the Black Sea, a number of Russian suppliers have taken a pause and decided to focus more on the local market.
The SteelOrbis reference price for ex-Russia billet has settled at $490-500/mt FOB Black Sea, down by $10-20/mt from yesterday and down $18.5/mt on average from last week. The lower end of the range corresponds to most bids from Turkey. Though some traders claim that they can achieve $520/mt CFR and one producer has said it could sell at $525/mt CFR, a few importing mills have said that the real bids are at $500-510/mt CFR, which are equivalent to $480-490/mt FOB. “Turkish mills are pushing for $510/mt CFR at worst... Shipment is not an issue, everybody is focused on the price,” an importer said. Last week, Turksih buyers were insisting on $530/mt CFR at the highest for ex-Russia billets, but bids have dropped sharply as scrap prices for HMS (80:20) have dropped in the latest deals by $14.5/mt on average over the past week, breaking through the $380/mt CFR mark.
In this situation, offers for ex-Russia billets have been limited and the lowest that can be agreed by sellers is assessed at $500/mt FOB. “We are afraid to confirm even $520/mt CFR. It is most likely that billet suppliers will fully withdraw from the export market,” a trader selling Russian billet said. “We were going to return with a billet offer for 10,000 mt [after some pause], but don’t know now as scrap has fallen,” a mill said.
Prices for other origins in Turkey have also moved down. An offer for open origin Asian billet (Malaysia, Indonesia, China) has been heard at $540/mt CFR Turkey, down by $10-15/mt from the previous levels heard last week. “China’s billets are softening, down to around $505/mt FOB for 3SP now, so others will follow,” a Singapore-based trader said. With the freight at $30-35/mt for a large volume, $505/mt FOB translates to $535-540/mt CFR Turkey, just adding the freight. An official offer from the Indonesian mill has been heard at $515/mt FOB today, down by $5/mt from that reported early in the week. Rumors about the possible imposition of export duty on billets in China have failed to stop the price downtrend and offers for Chinese origins are still heard with most market sources claiming that the investigation is in its very early stage.