Ex-CIS billet prices have gained support from demand from Latin America, where deals at higher prices have been signed this week. Exporters are also in negotiations with customers in Asia, though sales prices are lower there. Other markets for CIS-based sellers have been almost “dead”, SteelOrbis has learned from market sources.
The most discussed topic early this week were sales of 60,000 mt in total of ex-Ukraine billet from one the major producers to Latin America at $650/mt CFR, which translates to $610/mt FOB, including extras. The base grade price in this deal has been assessed by a number of sources at $595-596/mt FOB. Additional demand from Latin America for ex-CIS billet may be seen by the end of April.
“None of the producers wants to go below $600/mt FOB now,” the representative of an exporter said. Most offers have been heard at $600-610/mt FOB recently. Some mills, which are not in a hurry to sell and want to wait, have been asking even higher prices. “Mills are fairly well sold out, so prices will remain high,” a trader said, adding that this is possible even in the case of weak demand in the near future.
Though exporters have been bullish, the workable prices in the export billet market have not reached $600/mt FOB for base grade billet yet. The highest market level has been at $595-596/mt FOB in the latest sales, but “only Latin Americans can pay around $640/mt CFR and that too not for simple grades,” a trader said.
Demand for billet from China has faded away this week, following drops in the local billet market over the weekend. However, negotiations with other Asian buyers have continued. An offer from the Black Sea to Southeast Asia has been heard at $590-595/mt FOB this week, while the lower price level compared to Latin America is connected with higher freight, assessed at a minimum of $60/mt. As a result, this offer translates to $650-655/mt on CFR basis and above. One source said that a deal from Ukraine has already been done to the Philippines at slightly lower level - $645/mt CFR, but this could not be confirmed by the time of publication. And a number of sources said that negotiations are still in place and the deal has not been done yet.
About 30,000-40,000 mt of billet from Russia’s Far East region have been traded at about $650-655/mt CFR to Southeast and East Asia this week. The price level is similar to sales from the same region to China last week.
Other markets like North Africa, Turkey and the Middle East have been very quiet and activity has been close to zero. “There were not any firm offers from [the CIS] mills to Turkey this week,” a source said. Only traders have remained in the market with the price level around $590/mt CFR. Billet prices in Turkey could not rise, following other markets, as there are problems in sales of rebar and wire rod at higher prices, most sources agree. A demand improvement is expected after Ramadan.
The SteelOrbis reference price for ex-CIS billet has been increased to $590-596/mt FOB with the midpoint at $593/mt FOB, up by $3/mt on April 14 and up $8/mt since late last week.