Though the overall allocation of CIS billet in the export market has remained limited, sentiments have worsened this week due to no further positive movements in the scrap segment and weak demand for billet in key markets. SteelOrbis reference price for ex-CIS billet is $350-355/mt FOB, down $5/mt from late last week.
CIS-based mills have continued to insist for prices at $355-360/mt FOB and above, but most traders said that the workable level is at $350/mt FOB. Two deals for CIS billet have been concluded to Turkey at $368-370/mt CFR (about $355/mt FOB) last week. Moreover, some transactions have been heard by traders at slightly above $355/mt FOB for North Africa. But this week bids have been at a lower level at $350/mt FOB and up to $10/mt below, while trading activity has faded.
Mood in the CIS billet market have become more pessimistic following Egypt’s Supreme Administrative Court’s decision to implement higher than expected import duties for billets. One of the CIS-based suppliers has been offering billet from port at $375/mt CFR. Traders have been assessing the level of prices for Egypt at $370-375/mt CFR (equivalent to $345-350/mt FOB), but “the market is dead from both sides, semis purchases and rebar sales,” a trader said.
Though demand has weakened, offer volume is still limited, which might support prices in the near future. “There are only three big mills in the market. Everybody is sold out for November,” an international trader told SteelOrbis.
Further price trend will largely depend on new deep-sea scrap bookings or billet deals. Demand for CIS billet is expected to come from some Gulf Co-operation Council (GCC) customers in the near future. “When most buyers come back to the market again there will be some clarity in the price trend,” a supplier said.
China has remained active in billet purchases, but among the CIS suppliers only a mill from Far East ports of Russia has been able to sell recently. About 30,000-50,000 mt have been sold at $395-400/mt CFR. Offers from CIS to the Southeast Asia have increased by $5/mt to $403-408/mt CFR.