During the past week, ex-CIS billet prices to the international markets have declined by an average of $5/mt to $455-470/mt FOB. Meanwhile, market sources report that CIS-based billet exporters are reducing their prices to around $450/mt FOB in actual sales.
It is observed that, having been at higher levels than ex-CIS billet offers for some time now, Chinese billet quotations currently exceed the prices of CIS-based competitors by approximately $70/mt. Although CIS-based billet suppliers have gained a price advantage against China in the international markets, they are rapidly reducing their export prices in order to stimulate their sales amid the weakness of demand in their main target markets and also due to very competitive Iranian billet export prices.
Due to higher Chinese billet prices, demand for ex-CIS billet in the Far East has increased for a while now, while it is heard that Iranian billet suppliers have concluded new sales to this region at $450-455/mt FOB this week. Market sources state that CIS-based billet exporters have reduced their offers for the Far East to Iranian suppliers’ price levels. Iranian billet suppliers are also actively trading in Egypt, one of the main markets of CIS-based exporters, while a billet sale from Iran to Egypt has been heard this week at $450-455/mt FOB. On the other hand, Egyptian buyers’ demand for ex-CIS billet has not improved. Ex-CIS billet offers to Egypt are currently in the range of $475-485/mt CFR.
In the meantime, ex-CIS billet offers to Turkey are standing at $470-480/mt CFR. Although it is heard that Turkish buyers have concluded deals in this price range, overall demand for billet in Turkey is at low levels and billet purchases are made only in line with buyers’ needs. Additionally, Turkish billet buyers, who usually import billet within the scope of Turkey’s inward processing regime (under this scheme mills have to give a commitment to export the finished products they produce from imported billet), still lack a sufficiently clear picture of the future trend of their finished steel sales and so they have not accelerated their ex-CIS billet purchases.
On the other hand, it is believed that the rises recorded in scrap prices this week as well as the high levels of Chinese billet quotations may provide support for both domestic billet prices in Turkey and ex-CIS billet export offers.