Prices for ex-CIS billet have dropped this week, following the weakening of sentiment because of the sharp fall in China. Sellers from the CIS have turned more to the Turkish market and other closer destinations, while previously they were focusing on China and Latin America.
The SteelOrbis reference price for ex-CIS billet has slipped to $690-710/mt FOB with the midpoint at $700/mt FOB, down by $17.5/mt from the previous level.
Market sources connect this decline to the latest deals by traders and some non-traditional sellers to Turkey. For instance, a contract for 10,000 mt of ex-CIS billet has been reported at $723/mt CFR, which translates to slightly above $700/mt FOB.
Moreover, a non-traditional billet seller from Russia has managed to trade around 15,000 mt of billet at about $679/mt FOB. The material is going to be sold to Turkey, sources believe. But most market sources polled by SteelOrbis said that this level does not reflect the real ex-CIS market price level “at least for now.” “This deal reflects the market, but the Chinese market, not the latest prices from the CIS,” one source said.
In addition, two deals from traders for ex-CIS billet not from the major mills have been done at $700/mt CFR and $715/mt CFR to Turkey.
These lower-priced deals to Turkey and to some traders have caused sentiment to worsen. And at least one big seller source has confirmed that the tradable level has gone down to $700/mt FOB or slightly below for now.
Over the past few weeks, at least three to four large cargoes of ex-CIS billet from the Black Sea were sold to China, but at the moment and for the coming weeks this market has become unattractive for exporters. Bids have been heard at $680-690/mt CFR China maximum, translating to $620-630/mt FOB Black Sea. Before the drop which started last Thursday, the tradable level to China was at $720/mt FOB and above.
Latin American customers have booked at least two cargoes of ex-Ukraine billet. The first was at $715/mt FOB and the second at $720/mt FOB. And after buyers replenished their stocks, demand has faded away.
Demand in Africa for ex-CIS billet has been weak, with only small deals heard at $710-720/mt FOB.
Though sentiment in the market has worsened recently, most major CIS-based mills have been not willing to drop prices much, still insisting on $715-720/mt FOB. “There is no need to go down much as there is not much July shipment allocation,” an exporter said.