The sentiment in the Russian billet export market has remained bearish this week and offers have been reported at lower levels, amid weak demand. But the recent increase in scrap prices, heard today in an ex-EU deal, may lead to a halt in the downtrend in ex-Russia billet prices, market sources told SteelOrbis.
Early this week, a deal for ex-Russia billets was done at $540/mt CFR to Turkey, according to a number of sources. Though the volume is unknown by the time of publication, some market sources said that a contract was for 10,000 mt or so, translating to around $500/mt FOB Black Sea. The slightly higher price compared to a tradable level discussed at $520-535/mt CFR last week to Turkey is connected with the fact that this deal was done by a mill for Russian origin material, while previous sales were discussed for Ukrainian ex-Donbass billet, sold by Russians usually at lower levels.
Russian traders and mills are still offering ex-Donbass billet, from assets located in the occupied Ukrainian territory, at $525-530/mt CFR to Turkey, a number of sources said. A deal for around 3,000 mt of ex-Donbass billet was closed at $530/mt CFR last week. But “Russian origin is $540/mt CFR at the lowest,” a market source said.
Early this week, the Turkish market was not ready for a rebound. “Kardemir failed to sell much at higher prices,” a source said, commenting on the weak demand from Turkey. But market players are closely watching the situation as some rebound is still possible after the news of a deal for ex-EU scrap to Turkey at a $14/mt higher level compared to the previous deal. The market is waiting for more contracts for scrap before assessing new billet prices.
Also, offers from Russian sellers to Egypt have fallen by $20/mt over the past week to $550/mt CFR. “There is demand but buyers just keep bidding lower and lower,” a trader told SteelOrbis.
The SteelOrbis reference price for ex-Russia billet has been settled at $490-500/mt FOB Black Sea, with the midpoint of $495/mt FOB, down by $10/mt on the upper end of the range compared to last Friday.