The situation in the ex-CIS billet market has worsened over the past week as weakening sentiment in the scrap segment and falling prices in China have exerted pressure. But the majority of CIS-based mills have kept their billet prices firm as their total allocation has been visibly reduced due to maintenance at some mills.
The majority of mills have still been offering at $420/mt FOB Black Sea, with only some rare offers heard at $2-3/mt below this level. “Mills are still insisting on $420/mt, but for how long can they do it?” a source said. Some offers of CIS origin billet from traders have been heard at $410/mt FOB this week.
According to sources, one lot of Ukranian EAF billet has been sold at around $414/mt FOB Azov Sea. The material was purchased earlier and the shipment will be in October. Also, a trader booked ex-Belarus billet at $419/mt FOB Black Sea, a source said. There are indications in the market that the price level above $415/mt FOB is possible only in rare small-volume deals, but buyers are asking for discounts for higher-volume bookings. A contract for 45,000 mt of ex-CIS billet has been done at around $410/mt FOB to the GCC, SteelOrbis has learned.
“Everybody is waiting, watching China,” one trading source said. “Without support from China, everything will go down soon,” another trader said. Chinese traders have stopped importing recently, seeing a visible price decline in the local market. Iron ore prices have also posted a sharp fall over the past two days.
Nevertheless, the limited allocation in the market has been supporting CIS-based mills’ positions so far. According to sources, maintenance works at two major mills in the CIS has made the market more or less balanced as low demand faces low availability.
The SteelOrbis reference price for ex-CIS billet has been lowered by $1.5/mt on average since late last week to $410-420/mt FOB Black Sea, with a mid-point at $415/mt FOB.