Prices for ex-CIS billet have declined further recently as most buyers have been staying away from purchases, with no bookings concluded so far apart from one large deal to Latin America. The market has become more anxious as amid a lack of firm offers market sources have been waiting for lower prices in the next deals.
A deal for 45,000 mt of billet from Ukraine was closed at about $585/mt FOB to Peru, including extras, which corresponds to around $573/mt FOB for base grade, according to market sources. Though this level is almost in line with the SteelOrbis reference price reported late last week, a number of sources said that the tradable level is already at a lower level, taking into account buyers’ price ideas and negative sentiment.
A lack of firm offers has been reported so far with most sources saying that large mills may negotiate at $565-575/mt FOB, taking into account the current market conditions in Turkey. After Kardemir’s billet sales done today at $584-589/mt ex-works depending on the grade, sources have been estimating the workable price level for import billet in Turkey at $570-575/mt, which translates to $555-560/mt FOB.
Smaller CIS-based produces may provide prices at as low as $550/mt FOB, according to sources. But no one from major mills has been ready to even discuss anything below $560/mt FOB in negotiations in traditional markets like Turkey. “The mills are not keen to offer because they smell the market,” one trader said, adding that most of them have availability.
Demand has been sluggish not only in Turkey but also in other major destinations like North Africa or the GCC. Buyers in the latter are going to come back to the market only in the second half of February.
In Asia, the market mood has also been weak. There has been information about an offer of a large volume of ex-CIS billet from the Black Sea to the Philippines at $585/mt CFR, which potentially could be workable as last week the reference price in the market was $590-595/mt CFR. This price level from the Black Sea corresponds to around $545/mt FOB and it is considered more as an exception to the current market level. The market will also depend on prices of Chinese billet in the region in the coming days. The latest deals for billet from Russia’s Far East region were done at $600/mt CFR some time ago, but this level does not reflect the current market level.
The SteelOrbis reference price for ex-CIS billet has been lowered to $565-573/mt FOB or $569/mt FOB on average, down by $6/mt from the previous level since late last week.