The billet price increases from the CIS have gathered momentum since last week as mills have been increasing offers rapidly or have continued to withdraw offers, feeling the market still has some room to improve. The increasing scrap prices in Turkey and higher bids from some major destinations have added to the bullish sentiment.
Offers from major suppliers have been mostly at $450/mt FOB with very limited space for negotiations at lower levels. One Russian supplier has increased offers to $460/mt FOB. Last week, offers were mainly at $430/mt FOB and then at $440/mt FOB by the end of the week. “For now, only a few mills are in the market, others are watching,” a trading source said. Most mills have been offering billet only for January production.
Positive developments in the Turkish market, where offers for imported scrap from the US and Baltic region have reached $330/mt CFR and above, have supported CIS-based billet exporters. The tradable price level for ex-CIS billet in Turkey has already reached $440/mt FOB and, if higher prices are confirmed in new scrap bookings, it will be possible for suppliers to get $450/mt FOB or even above in the future, sources believe.
Sentiment in Asia has also been supportive. The latest bids from Manila have been heard at $475-485/mt CFR, local sources said, up by $10-15/mt from last week. In China, a supplier from Russia’s Far East region has managed to sell at $480/mt CFR. This price level corresponds to $440-442/mt on FOB Black Sea basis. “Since Friday, bids from China have been at $480/mt CFR [for CIS billet], but there have been almost no discussions as there are no volumes. Everything is booked,” a source said. Recently, rare offers from the Black Sea region to Asia have been reported at $490-495/mt CFR, which translates to $450-455/mt FOB.
The SteelOrbis reference prices for ex-CIS billet has increased by $10/mt from late last week to $440-445/mt FOB.