Ex-CIS billet prices have dropped further this week, coming very close to $600/mt FOB, as the sentiments in the major outlets have been very weak and demand improvement is not expected soon.
A deal for 35,000 mt of ex-Ukraine billet has been done to Latin America at $605/mt FOB base, according to market sources. Another deal for 30,000 mt of ex-CIS billet to the same destination has been rumoured in the market at $610/mt FOB, but this could not be confirmed by the time of publication. “It is hard to go below $610/mt FOB nowadays,” a seller source said.
Offers from the large ex-CIS sellers have gone down to $615-620/mt FOB Black Sea, dropped from $630-640/mt FOB last week. “There is no market at this price, but even at $600/mt FOB it is challenging,” a market source said.
Slow rebar trade and low prices still weigh on the billet business in Turkey. Therefore, the gap between the workable levels for rebar and the billet offers is too narrow to trigger large sales in both domestic and import markets. Locally the prices are at around $630-645/mt ex-works depending on the region with Kardemir selling only 17,500 mt of billet at $638-643/mt ex-works as of today, August 25. “Kardemir is for deferred payment and let’s say $15-16/mt below their price is in line with the other local mills and imports,” a trader told SteelOrbis. In the meantime, the lowest import offer reported to Turkey this week is at $630/mt CFR and going up to $645/mt CFR if the reasonable offers are taken into consideration. As a result, the CFR levels to Turkey from the CIS dropped by around $10-20/mt over the week. The freight rates are considered currently to be at $25-40/mt depending on the region, which means the CIS-based suppliers will hardly sell over $600-605/mt FOB base to the Turkish market.
The current tradable level for import billet in China is at $670-675/mt CFR and though it has visibly improved, taking into account the freight from Black Sea at $80/mt this will translate to only $590-595/mt FOB.
The SteelOrbis reference price for ex-CIS billet has fallen to $600-610/mt FOB Black Sea, down by $17.5/mt from the previous level, settled late last week.