Russian billet exporters, shipping from the Black Sea, have faced a strong weakening of demand with Turkey remaining the only possible sales destination. But even there, demand and the bid prices have been declining due to the softening in the scrap and rebar segments. As a result, ex-Russia billet prices have decreased this week, though they are varying depending on the mill, while a number of producers have stayed away from the export market as the current prices are lower than their costs.
Import billet pricing is still uneven in Turkey and to a large extent depends on the size of the cargo, product origin and shipment details. Still, only a few Russian suppliers are there to sell to Turkey, and so some of the buyers who need to restock do not have much choice. One of the traders has recently sold a total of 6,000 mt of billet at $577/mt and $579/mt CFR, SteelOrbis has learned. “It is a high sale but 3,000-5,000 mt takers cannot find better as there is no one else offering. Metallo offloads to buyers of at least 15,000 mt,” a source commented.
The market price for freight for such small cargoes from Russia’s Black Sea region to Turkey is assessed at $65/mt, but the supplier is said to be able to get lower freight, having its own vessels. So, the FOB level in these deals have been assessed by market sources on the higher side, at above $520/mt FOB.
A large Russia-based billet producer, according to the market information, sold two lots at $550-555/mt CFR previously. It is among a few sellers still offering. This week, a 30,000 mt lot was rumoured to have been sold at $540/mt CFR but the deal has been denied by the alleged seller and the information has not been confirmed by the time of publication. Some of the market players believe this deal is a manipulation, stating that for big lots Turkish buyers would aim for much lower levels. “[If not Russia] Turkey does not have any source other than Iran at the moment and one must be crazy to buy from Iran. In addition, no one wants to bring a vessel to the Black Sea,” a trader told SteelOrbis.
Demand from another previously big market for Russian billet sellers - North Africa - has come down to almost zero. The indicative price level from Russian suppliers to Egypt was at $560-570/mt CFR, similar to early this month, but the problems with payments and a lack of currency have stopped almost all negotiations. High port stocks of billets have been adding to an already complicated situation. “We have only Turkey at the moment,” one Russian seller said.
In the Asian market, Russian billet suppliers have been trying to push up prices. The main supplier from Russia’s Far East region has been asking for 525-535/mt CFR in Taiwan and China. Since last week, importers from Taiwan have started to make inquiries with the highest tradable level having been heard at $530/mt CFR early this week, but by Friday it has slipped to $515-520/mt CFR at best after the fall in futures in China. Bids from China have fallen to $500/mt CFR, so Taiwan could be assessed as a good sales destination for Russian suppliers.
The SteelOrbis reference price for ex-Russia billet has been at $515-520/mt FOB on Friday, August 19, stable from the previous day, but down $10/mt over the past week.