Ex-Russia billet trading limited even after price fall, mills try to sell other products

Interest in ex-Russia billet has remained limited over the past week despite the latest price decreases. The major issue is still risks, with buyers not ready to accept any of them.

Though most offers from Russian mills have been at $800-810/mt FOB Black Sea, the FOB level could easily be lower as most offers are on CFR basis and lower volumes will lead to higher freight costs. But the main reason for the low trading activity is not demand itself, but the risks that buyers do not want to accept.

A deal for 5,000 mt of ex-Russia billet has been done by a trader, Amesco, at $830/mt CFR Egypt with 100 percent cash against document payment. The deal price level is about $20/mt below the previous contact signed for Egypt in the middle of the month. This trader “has been trying to sell, dropping the price until someone bought. But for the buyer it has no risk. It’s a small quantity,” a market source said, adding that, as the payment is cash against the documents, the trader who made the deal may renegotiate this lot if there are any problems.

As for Turkey, as SteelOrbis reported earlier, 15,000-20,000 mt were sold at $840-855/mt CFR depending on the region, all for cash payment upon cargo arrival. As a letter of credit is not possible for ex-Russia billet, the majority of Turkish buyers are staying away from purchases even with $830/mt CFR in offers.

The Russian producer Tula has been focusing on pig iron exports, not being active in billet offering. Market sources said that pig iron sales were the main business of the buyer and that prices are very high there, while the producer is not interested in resuming billet or long product sales abroad.

Abinsk and Novorosmetal have still been active in offering billets from Novorossiysk port, but no new deals have been reported. In contrast, one of them was trying to sell wire rod and rebar in coils at $945/mt CFR to Israel, with payment discussed through a Dubai-based company. This price is much lower than wire rod offers from other suppliers, while in particular ex-Turkey wire rod is available at $1,050/mt FOB and above.