Uncertainty has prevailed in the CIS region’s billet export market this week, as falling scrap prices in Turkey have been putting pressure on suppliers, while most buyers have been staying away from purchases.
The SteelOrbis reference price for ex-CIS billet at Black Sea has been lowered to $540-550/mt FOB by the end of this week, down by $24/mt from the level earlier this week and down by $30/mt from last week. Rare offers from some CIS-based sellers have been reported at $550/mt FOB and one producer has confirmed that "$550-560/mt FOB would be a good price for now," SteelOrbis has learned. Last week, most producers were insisting on $570-580/mt FOB.
At the same time, there has been no information of any firm bids from the majority of buyers and market sources have been estimating the workable price level at around $540-545/mt FOB, taking into account the current scrap prices in Turkey. “Today there is no market price, but Turkish importers will start to ask for billet next week,” a trading source said. Some improvement in demand for billets in Turkey may be connected with the foreseen stabilization in the scrap market after the latest deal at $416/mt CFR for HMS I/II 80:20.
“Last week, there were expectations for a market correction, but this week some elements of panic have emerged,” another trader commented on prices.
Apart from some possible improvement of demand in Turkey next week, market sources await another deal to Latin America. Customers from North Africa are absent as buyers in Tunisia are in wait-and-see mode, while others like Egypt and Algeria face unfavourable market conditions and are not able to buy imported billet.
Most producers are not voicing firm offers, seeing a lack of demand at present and preferring to watch developments in the scrap market.