CIS-based billet producers have managed to conclude deals to all major sales destinations this week - to North Africa, GCC, Asia and Latin America. The majority of deals have been concluded at $395-400/mt FOB; however, some large volumes have been sold with discounts closer to $390/mt FOB. Most market participants are bullish in their expectations for the near future.
A deal for up to 50,000 mt of ex-Ukraine billet has been done to Saudi Arabia at $423/mt CFR, which corresponds to about $396/mt FOB, SteelOrbis has learned. A contract for 10,000 mt to Algeria was signed earlier this week at $421/mt CFR (market sources estimate the freight rate at about $25/mt). As SteelOrbis reported earlier, several cargoes of ex-CIS billet have been sold to Tunisia at $395-400/mt FOB. “The workable level has not exceeded $400/mt FOB so far, but with a further scrap price increase it will be possible,” a trader said.
A sizable cargo of 50,000 mt of ex-Ukraine billet has changed hands at $433/mt CFR Indonesia and, taking into account that freight is not lower than $40/mt, the FOB price is assessed by market participants at $390/mt or a few dollars higher. Though this level is much lower compared to deals in the MENA region, this allowed the producer to sell a large volume in one lot and to insist on higher prices in the near future.
Demand for ex-CIS billet will persist as there have been fresh requests heard in North Africa, in Morocco and Algeria, in particular. Moreover, some demand can be seen from Asia.