Following the sharp rise in scrap prices in Turkey, market participants have been expecting ex-CIS billet prices to increase. For now, the pressure on steel exporters has eased as the majority of them have already sold out for May shipment. However, prices have not posted any visible increase so far without support from the buyers’ side. Only small positive moves have been seen.
Most major billet suppliers have been not giving firm offers lately, but the acceptable level has been at a minimum level of $335/mt FOB, sources have said. Nevertheless, bid prices from major customers have been seen at $325-330/mt FOB mostly. A deal for 10,000 mt from Ukrainian EAF producer has been reported $330/mt FOB this week, which is usually priced up to $5/mt lower than billet from the first-tier mills. “Mills are not in a hurry to sell cheaply. It seems that the market passed the bottom,” a trader said.
However, the latest contracts from large suppliers from the CIS have been disclosed at lower prices. A contract to Egypt has been done at $345-350/mt CFR, which corresponds to about $325-330/mt FOB Black Sea. Some sources confirmed that there has been more than one deal. “Egypt is buying right now,” a CIS-based seller said.
Moreover, there has been information about a sale of billet to Turkey at about $345/mt CFR (about $325-330/mt FOB). This information has not been confirmed by the time of publication, but sources agree that “this was the tradable level last week.” Sellers have been waiting for higher bids from Turkey this week after an increase of more than $30/mt in scrap prices. It is expected that demand for imported billet may improve in the near future, some sources have said.
But for now “demand is bad elsewhere. Scrap increased because there are no scrap [volumes], but it didn’t help billet,” a mill said. “There is no change at all. It is still hard to find buyers even at $330/mt FOB,” another source said.
The tradable level for billet in China has been at $360/mt CFR recently, which is a good sign, taking into account that most bids were reported below this level last week. Traders have said that there have been no fresh deals from the Black Sea region to China so far. The previous booking for CIS billet from the Black Sea was at $360-365/mt CFR China (some $330/mt FOB) more than a week ago, while from Russia’s Far East the previous booking was at $368/mt CFR China.
The SteelOrbis reference price for ex-CIS billet from the Black Sea region has increased to $335/mt FOB from $330-335/mt FOB.