The higher price level of ex-CIS billet has been confirmed in a recent sizable sale to Southeast Asia. And though most exporters are still insisting on a minimum of $600/mt FOB, pressure is increasing due to lower scrap prices and weak demand from the main billet sales destinations.
According to a number of sources, a contract for 50,000 mt of ex-Ukraine billet has been signed to a major buyer in the Philippines at $650/mt CFR. The freight has been estimated at $50-55/mt, bringing the FOB deal price level to $595-600/mt FOB, SteelOrbis has learned. Earlier this month, the freight to the Far East was estimated at $60/mt, but the rates have started to gradually decrease, according to sources. This deal was negotiated since last week and customers were ready to pay $645/mt CFR, as reported earlier.
Nevertheless, overall market sentiment has not improved since last week in general aming CIS-based billet exporters. Mills are still offering at $600-610/mt FOB, but, apart from the one sale to SE Asia, there have been no other transactions reported. Moreover, the number of enquiries has been limited.
Chinese customers have not been active. After local prices in Tangshan retreated by RMB 20/mt ($3/mt) to RMB 4,940/mt ($759/mt) ex-works, bids for import material have been lower or absent. Traders said that it would be hard to sell non-ASEAN billet even at $640/mt CFR now. “Restrictions for re-rollers [announced starting from late last week] cut demand for billets in Tangshan. The market is weak now,” a source said.
Demand from other outlets has also been “on pause”, according to a CIS-based seller. “We are not cutting prices. Mills are still asking for $600/mt FOB and higher,” another exporter said. The lack of high allocation following good sales previously is supporting producers’ prices for now.
But the mood in the market has already started to worsen, following some weakening in the scrap segment and still very low bids for import billet in Turkey and North Africa. The tradable price level for the Turkish market is still not above $600/mt CFR, removing this destination from the range of interest of the major CIS-based exporters.
Based on the latest deal, the SteelOrbis reference price for ex-CIS billet has increased by $4.5/mt to $595-600/mt FOB Black Sea, with the midpoint at $597.5/mt FOB.