CIS-based billet exporters have been asking prices about at least $10/mt higher for December production billet as supply in the market is still limited. However, there has been a lack of response from customers so far. The SteelOrbis reference price for ex-CIS billet has increased by $5/mt since last week to $365-375/mt FOB.
Most offers from major CIS-based mills have been announced at $370-380/mt FOB for December production and are even higher from some suppliers. Offers at the lower end of the range have been heard only from one producer. But the workable level in the market has stayed at $365-370/mt FOB, sources said. The latest sales to Africa and Latin America have been concluded at these levels, but for November production billet. “We have not started December production sales,” a major Russian producer told SteelOrbis.
Suppliers have been able to close November order books at higher levels compared to deals in the first half of October owing to reduced allocation, as major Ukrainian producer DMK has focused on producing billet only for its own rebar production, while the smaller Ukrainian mills DMZ and Elektrostal have also been out of the market, and Belarus-based BMZ stopped operations for 24 days of maintenance works.
This week, there have been some reports of offers from a Ukrainian mill, which has not been in the market for more than a month, at up to $400/mt CFR Turkey, which corresponds to $385/mt FOB. But the suppliers have mainly been testing the market. Current offers from CIS-based exporters are still too high for Turkish customers, who assess the current workable levels as not being higher than $380/mt CFR for sizable lots.
Some demand is expected to come from Africa and the Gulf Cooperation Council (GCC) region in the coming weeks, but “this is the question, what price can be accepted by the customers,” a trader said. The deals in Tunisia and Egypt have been reported at $385/mt CFR more than a week ago.