The CIS billet export market has showed minimal activity this week as the major buyers from Turkey have left the market. At the same time, most large mills from the CIS have not been ready to cut prices more for now, seeing firm scrap prices and rebounding futures in China, coupled with remaining allocations which are not at high levels.
Offers from the mills have been reported at $630-640/mt FOB Black Sea, while some of the producers are still seeing the market at $640-650/mt FOB at least.
Following deals to Turkey done at around $625-630/mt FOB last week, there have been no bids from this market recently, while negotiations for ex-CIS billet have been held in North Africa at $625/mt FOB. No fresh deals have been reported this week with “even mills’ direct trading almost halted,” a source said.
In the domestic billet market in Turkey, hardly any offer has been heard this week, but the indicative level is estimated at not below $700-710/mt ex-works for now. “Basically there are no local [billet] options at the moment but the lowest price considering the current production costs may be $690/mt ex-works,” a trader said. Import billet sellers report there are no buyers asking a price this week and no bids heard whatsoever, emphasizing that small lots were booked earlier at up to $700/mt CFR levels when the market had been peaking, taking into account that afterwards the workable import billet prices fell in a few steps to $660/mt CFR for 10,000 mt, sold last week. The latest deal for a much smaller volume was done at $670/mt CFR, SteelOrbis has learned. The average freight to Turkey is now estimated at $35/mt.
Basically, both ex-CIS billet sellers and Turkey-based buyers are not under much pressure to negotiate and have some time to watch the market. In addition, there is no firm price for the stressed cargoes from Middle East and Asia in the Turkish market, partly as there are no solid offers from the CIS and also taking into account that the traders would like to evaluate the market situation in Asia after the most recent developments.
The tradable level in Southeast Asia for imported billet has slipped by $10/mt to $650-660/mt CFR this week, while official offers from mills in Russia’s Far East region mills are still hardly below $670/mt CFR. On November 11, rebar futures in Shanghai Futures Exchange increased by 7.42 percent, giving hope for some rebound in the Asian market soon. But “China’s market is not so important [for billet sellers from Black Sea] now, as prices are still far below $700/mt CFR there,” a source said, adding that the scrap price trend is being more closely watched by the market participants in the region.
The SteelOrbis reference price for ex-CIS billet has been settled at $625-640/mt FOB Black Sea, with the midpoint of $632.5/mt FOB is just $2.5/mt below the level seen late last week.