The ex-CIS billet market has been hit harder than expected by the freefall in the Chinese market, as it has occurred in tandem with the weakening of demand in other major markets like Turkey or Africa.
The SteelOrbis reference price for ex-CIS billet from the Black Sea region has dropped to $640-670/mt FOB, with the midpoint at $655/mt FOB, down by as much as $45/mt on average compared to last week.
Some Russian and Ukrainian suppliers have lowered their price ideas to $660-670/mt FOB this week, according to a number of sources, trying to attract customers. “But there is no market anywhere,” a trader said. A few other sources also said that buyers in the major markets like Turkey and Africa have been cautious in giving any firm bids, and are just watching the markets.
Some offers from eastern Ukraine have been reported to Turkey at $680-685/mt CFR, while traders have been asking for $685-695/mt CFR depending on the region.
According to market reports, 35,000 mt of billet from Ukraine are rumoured to have been sold to Asia at $735/mt CFR last week. This has not been confirmed by the time of publication, but some sources do not exclude this, if the deal was for East or Southeast Asia for a special purpose and done at no later than the middle of last week. The CFR price level corresponds to $675/mt FOB.
But, for now any prices above $700/mt CFR would not work in Asia, SteelOrbis has learned. “China is dropping the market… Some mills [from the CIS] can wait but how and when will things become better?” one producer said. “China is very weak, but other markets are also stuck. There is no clarity in scrap, so billet had to fall,” another source said.
Chinese importers were ready to pay the equivalent of $620-630/mt FOB Black Sea, sources have said. And negotiations at $640/mt FOB were in place with the Black Sea sellers.
No fresh offers have been heard from Russia’s Far East region as the major producer there has closed its July shipment order book.