Buyers in the MENA region, North Africa mainly, have been trying to find substitute material for ex-Ukraine billets recently, as a large volume bought earlier will not be delivered due to Russia's war against Ukraine. Though Russian suppliers have come back with some offers, sales have been reported only to Asia from Russia’s Far East ports. Russian sellers are trying to come up with stratagems in order to continue their exports.
Over the past week, buyers from North Africa have been trying to purchase billet to substitute large volumes of at least 100,000 mt, with the major sources being India and Turkey. According to sources, deals were closed in the wide range of $850-900/mt CFR to the region, mainly done last week. Buyers have been ready to purchase at $850-860/mt CFR, but the market activity has cooled down this week. “People are trying to find anything available around,” a Europe-based trader said.
Also, offers to the MENA region have been reported from Southeast Asia at around $750-780/mt FOB early this week, which may be much higher now after the latest increase in CFR prices in Asia.
Offers for ex-Turkey billet were increased from the last tradable level at $850/mt FOB to $860-870/mt FOB early this week, but they are estimated at $880-890/mt FOB at the moment, taking into account local gains and the bullishness in the market in general.
Turkish buyers’ focus is still on their local market. After Turkish producer Kardemir sold 85,000 mt of billets locally at $880-885/mt ex-works on March 8, offers in Izmir have been reported at $900-920/mt ex-works. Suppliers in Iskenderun have been asking for $890-910/mt ex-works. Last week, local prices in Turkey were standing at $850-870/mt ex-works.
There has been a lack of import billet offers to Turkey recently and sources said that Turkey is willing to pay $860/mt CFR. Small parcels of ex-Russia billet for prompt shipment have been offered at $900/mt CFR.
Market sources have been reporting that Russian suppliers have restarted offering more actively since last week, though no offer prices have been voiced. “Even shipments from Novorossiysk are continuing the same as before,” a trader said, adding that it is still unclear how to work with Russian volumes for now. “It’s all a mess, but yes logistics are more difficult than payments. Maybe Russian vessels will only operate from Russian ports,” he said.
Another trader said that most banks that were working with ex-Russia billets will reject LCs for any regular sales destinations like Tunisia, Egypt or Latin America. In the future, “China may buy Russian steel and sell to the West,” a trader said. But again, the transportation issues from the Far East will exist, in particular availability of vessels, etc. In addition, for payments for Russian billets, market players may use Pakistani, Chinese or Turkish banks to avoid sanctions. For now, ex-Russia Black Sea trading has remained halted.