Moods and business activity in the ex-CIS billet market remain high, supported by the positive scrap market in Turkey and moderate demand. As a result, the workable level for exports has increased over the past week in some deals closed to several destinations.
This week, an ex-Ukraine 30,000 mt billet cargo has been sold to Turkey at $542/mt CFR, which is calculated at around $527/mt FOB. While it was initially said that the price did not include any extras, most market players believe the deal was done for wire rod grade billet and that it would have some extra cost in production for some other large CIS-based mills.
Earlier this week, a few cargoes were reportedly sold to Turkey again from Ukraine at $515-518/mt FOB, which corresponds to around $530-540/mt CFR. In addition, a small lot has been rumored as being sold to Peru at $520/mt FOB from Russia. However, most major exporters have denied the sale and stated that it could only have been done by a trader for a position cargo.
As a result, workable prices for ex-CIS billet have gone up sharply over the past week. Last week, an ex-Ukraine 50,000 mt lot was sold to the Dominican Republic at $540/mt CFR, which is around $500/mt FOB. In addition, limited lots were booked last week by a trader from a marginal Russian producer at $502/mt FOB, SteelOrbis has learned. So basically ex-CIS prices have increased by $15-20/mt over the past week. “There is no market for us. We do not know what the price for billet will be with such sharply rising scrap prices [in the local market in Russia],” one Russia-based billet exporter said. He added that in the current market conditions it is possible to sell at $520-525/mt FOB.
Currently, suppliers are focused on negotiations with Turkey, where the scrap, longs, and local billet prices have continued to go up. Moreover, last week Turkey booked a 50,000 mt billet lot from Qatar at $510/mt CFR and such a situation is largely unprecedented. Some orders have been reported from North Africa, but the bids are at $520/mt CFR, being hardly acceptable to CIS-based sellers.
Billet from Russia’s Far Eastern ports has been sold at $520/mt CFR to the Philippines recently, which is too low for producers from the Black Sea.
As a result, it is expected that billet prices will be supported by costlier scrap, which can hit $400/mt CFR in Turkey this month, sources estimate. In addition, billet supply has been tight in the market lately. In particular, there are some delays in shipments from Rostov in Russia due to low water levels. Large CIS-based producers have more or less filled their order books for now as well.
SteelOrbis’ daily reference price for ex-CIS billet is now set at $520/mt FOB, up by $5/mt on December 9.