CIS-based steel mills came back to the billet export market this week after their holidays, having mainly positive expectations and offering higher prices. However, market sentiment has changed by the end of the week due to the weakening in the scrap segment in Turkey and the very limited inquiries for billets.
The week started with offers from CIS-based mills at $620/mt FOB, but later a number of sellers withdrew their offers, waiting for a clearer market direction. “They started realising that the market is not there at all,” a trader said. The offer price level has been mainly at slightly above $600/mt FOB late this week, with some rare offers from Russia reported at $590/mt FOB.
One Ukrainian mill has reportedly sold a cargo to Latin America, to the Dominican Republic to be precise, at about $600/mt FOB for base grade. But no other deals from major CIS-based mills have been reported since.
Traders have been in negotiation for ex-CIS billet at $595-600/mt FOB, according to sources, to Turkey, but overall buying activity in the market has very week.
Buyers from Africa may consider buying import billet for quick shipment at about $610/mt CFR and market activity has also been subdued.
In Turkey, some small Russian billet cargoes have been sold at $605/mt CFR or slightly above, according to market sources. The number of inquiries from Turkey has been quite limited as market participants are waiting for more bulk deals for scrap at lower prices.
In Southeast Asia, prices in negotiations from Russia’s Far East region have been lowered to $600/mt CFR, down by $5-10/mt compared to deals to the Philippines last week.
Though all market sources agree that the market has weakened over the past week, most of them doubt that prices for ex-CIS billet will fall rapidly and sharply in the near future. The offered volume for billet in the export market has been pretty low and most exporters are not in a hurry to sell, and so they will wait for a clearer picture by the end of the month.
The SteelOrbis reference price for ex-CIS billet has been lowered to $595-600/mt FOB, down by $7.5/mt from the previous average level of $605/mt FOB.