Though demand for ex-CIS billet in a traditional market like Turkey has been poor this week, most major producers have increased offers, given the rising Chinese market and some demand from Latin America.
New offers from large Ukrainian mills have been heard at $660-670/mt FOB, up by at least $10/mt compared to last week. This increase in offers has been mainly due to the strong sentiment in the Chinese market, where a number of producers have been looking for import billet, anticipating severe production cuts in the second half of the year, which have already started to emerge in some provinces in China.
The tradable level for import billet in China is at $710-720/mt CFR at the moment, according to market sources, which taking into account freight of at least $70/mt translates to $645/mt FOB Black Sea. However, the FOB price could be at a lower level - $635-640/mt FOB, as the freight strongly depends on volumes and ports.
Around 40,000-50,000 mt of billet from Russia’s Far East region have been traded at $725/mt CFR to China this week, though this included some extras for the grade, a number of traders stated.
“Now, activity is reduced, but we are in talks here and there,” a CIS-based producer said. Some market participants believe that high offers from the Black Sea mean that sellers are not in a hurry to push volumes for export at cheap levels, expecting the market to gain support by the end of this month.
Around 80,000 mt of ex-Ukraine billet were sold at about $650-655/mt FOB base to Latin America, SteelOrbis has learned. But the FOB price could be changed and be lower as “the freight is the big question,” a market source said.
Ex-CIS billet buyers from Turkey and the Middle East have been absent this week due to the holidays.
The SteelOrbis reference price for ex-CIS billet has been increased from $640/mt FOB late last week to $645-650/mt FOB.