Weak scrap prices and lower bids from traders and most customers in major sales destinations like North Africa, Turkey or the Gulf have put pressure on the ex-CIS billet market with prices posting a slight decline compared to last week.
A deal for ex-Russia billet has been heard to a trader at $605-610/mt FOB with the final destination expected to be Tunisia, though this could not be confirmed by the time of publication. Some other sources said that bids from Tunisia are coming at $655/mt CFR, which translates to around $605/mt FOB Black Sea, taking into account the freight for a small volume. A week ago, a sale to Tunisia was reported at $670/mt CFR.
Also a contract for 30,000 mt from a large Ukrainian producer has been signed at around $605/mt FOB on the average with the final destination said to be the MENA region.
In Egypt, negotiations for ex-CIS billet have been in place at $660/mt CFR, but no deals have been reported so far, and the price is also $10/mt below the highest level seen in late November. “Egypt is asking such numbers that are not available at the moment, so it’s frustrating,” a trader said.
One contract for 10,000 mt of ex-Ukraine wire rod grade billet to Turkey has been reported at $635/mt FOB, but this level has not been included in the reference price as the deal is said to have been signed before scrap prices drop and to be for February shipment. At the moment, rare bids for base grade billets have been coming from Turkey at $630-640/mt CFR, down by $10/mt from early this week, while most large CIS mills have been not ready to provide offers much below $660/mt CFR.
In terms of offers, CIS billet producers have been insisting on $615-625/mt FOB for base grade. The lowest level at $600-610/mt FOB in offers have been from eastern Ukraine, shipped from the Azov Sea. But a number of sources agree that $600/mt FOB is not the real market level as no one from large mills can give it now and business with eastern Ukrainian suppliers is risky.
Traders have been bidding at $600/mt FOB to mills, but this has been too low for most sellers. “The real market demands $600-610/mt FOB, but it is hard to find sizable volumes at the lower end. Not all Russian mills have come back,” a CIS-based seller said.
The SteelOrbis reference price for ex-CIS billet has settled at $605-615/mt FOB with the midpoint $610/mt FOB is $2.5/mt below last week.