Large CIS-based mills have been looking for sales to distant markets, to China in particular, to achieve deal prices above $600/mt FOB. Latin America has also been a target market for CIS exporters. Nevertheless, for now only single contracts have been reported to distant markets, supporting price levels, while the pressure from the traditional Turkish market has been increasing, weighing on prices.
A contract by a Ukrainian producer has been heard at around $705/mt CFR China this week for a cargo not less than 50,000 mt. The freight for this lot has been assessed at $85-90/mt to China, but market sources add that the price may include additional $10/mt expenses for waiting for at least two weeks at the port in China before discharge. This means that the FOB price level translates to about $605-610/mt FOB. No other deals from the Black Sea region have been reported yet, though “all CIS mills from the Black Sea were watching China now,” a source said. Most offers are $700-710/mt CFR at the moment, but, since rebar futures in China have decreased today, buyers have become more cautious. For instance, today SteelOrbis learned that one Turkish producer was offering billet at $705/mt CFR China, but was rejected.
Chinese importers are still interested in purchases, but they have become more cautious and prefer now to focus on lower-volume purchases from the ASEAN region. In particular, Indonesian and Vietnamese producers have sold an additional 10,000 mt each at $705/mt CFR to China just recently. But for large-volume lots with longer lead times, the tradable level is $700/mt CFR and below now, sources have said.
40,000-50,000 mt of 150 mm billet from Russia’s Far East region were sold to China at $700/mt CFR early this week, as SteelOrbis reported yesterday.
Latin America has also been an attractive sales destination for CIS-based sellers and negotiations have already been restarted, according to sources. Though no new deals have been confirmed for this destination so far, most sellers expect the tradable level to be around $600-610/mt FOB as not many mills may offer the needed grades.
Nevertheless, the situation in Turkey has continued to put pressure on ex-CIS billet prices. A contract from the CIS has been rumoured at $620/mt CFR this week and, though this could not be confirmed by the time of publication, it is the highest possible sale prices to Turkey at the moment, most sources believe. So the FOB price from the Black Sea to Turkey has been assessed at below $600/mt FOB. “I believe that price [from the CIS for Turkey] is already at $585-590/mt FOB maximum,” a trader said.
The SteelOrbis reference price for ex-CIS billet has been widened to $595-610/mt FOB Black Sea. The range is down $5/mt on the lower end today due to weaker sentiment and the tradable level to Turkey. At the same time, in the week-on-week comparison the range has not been changed and remains at $602.5/mt FOB as the higher end has been increased also by $5/mt in a sale to China.