Though most major CIS-based mills have continued to offer at the higher price levels announced last week, buyers have been reluctant to accept them. Moreover, in some outlets customers have not been giving any bids. Surging freight rates have also been affecting the trading activity in the billet market significantly.
Most large CIS-based mills have been offering at $660-670/mt FOB this week. $650/mt FOB is still considered as workable, though no official prices at this level have been reported. One source said that, as mills have already started August shipment sales, they are not in a rush to push volumes now and to provide bid discounts.
One contract for ex-Ukraine billet has been rumoured to Latin America, but the price level could not be confirmed by the time of publication. Though mills have been asking for $660-670/mt FOB in this destination as buyers have not had many options where to buy, the increased freight rates may put pressure on the deal price level. According to some traders, the freight from the Black Sea to the Caribbean has increased up to $70/mt, from around $50/mt.
In other sales destinations, trading has been extremely poor. “The market is stuck with no bids for import cargoes,” a source said, explaining the situation in Turkey. The nominal price level is set to be at $680/mt CFR and below for ex-CIS billets. But the freight rates have increased this week from $20-25/mt to $27-36/mt depending on the region.
No demand has been seen in Europe after the 15,000 mt sale at $685/mt CFR to Italy two weeks ago.
China has not been a sales destination for ex-CIS billet suppliers at the moment as the maximum acceptable levels were at $675-680/mt CFR, taking the FOB price below $620/mt. In Southeast Asia, billet from Russia’s Far East region was sold at $690-700/mt CFR to the Philippines last week. This week, customers have been ready to purchase at not below $700/mt CFR.
The SteelOrbis reference price for ex-CIS billet is settled at $640-660/mt FOB on Friday, with the midpoint at $650/mt FOB, down $4/mt from last week.