Russian & Indian local markets keep billet market on its feet for now

There is not much activity in the Black Sea and Mediterranean international billet markets in the two-week period after September. CIS-origin billets have found buyers at $420/mt FOB Black Sea and Caspian Sea in Italy and Iran. CIS-origin billet offers have remained unchanged compared to September. Prices range in $410-420/mt FOB for late November / December loadings. However, Middle East and Europe are not showing much interest in these levels. On the other hand, producers are not eager to reduce their sales prices due to the strong Russian domestic market and due to the busy shipments up to the end of November. Most Turkish billet producers focused on the domestic market rather than exports on the back of a strong long products market. For now, Turkish domestic billet prices are in a price range of $450-460/mt ex-works. Turkish billet export offers are at $440-450/mt FOB for late November / December loadings. The markets are not showing much interest in these levels. However, Turkish producers are not feeling apprehensive about this situation. The strong domestic market and the busy period almost up to December has meant that they are not making aggressive offers for export. CIS-origin billet offers for Turkey are at $430-445/mt CFR Turkish ports mostly for November / December shipments. Despite the lack of billet in the Turkish domestic market, buyers are not showing interest in these levels as they are unsure about the movements in the market up to the year's end. Italian long prices – especially rebar – are in a downward trend. In addition, Italian exports are also reported to have slowed down slightly. Buyers who purchased CIS-origin billet at $440-445/mt CFR Italy are not eager to accept offers at $435-445/mt Italy due to these reasons. Indian, Chinese, Turkish and CIS-origin billets were in competition with each other, especially during mid-summer, in the Middle East and Gulf. The market was again controlled by Turkish and CIS-origin billet due to the light decrease in their prices and especially due to the rise of Chinese billet prices. Due to the high level of the Turkish and CIS prices in mid-September, Indian-origin billet sales were concluded at $425-435/mt CFR to the Gulf region. However, both Indian domestic and export prices indicated a rise of $10-20/mt last week. Some producers even raised their prices up to $405/mt FOB Indian ports. Buyers generally prefer the Indian billet when it is $15-20/mt lower than other billet offers. The increase in Indian billet prices may affect the country's billet exports negatively. Although Chinese domestic billet prices dropped to around $350/mt, export offers did not seem to fall below $370/mt FOB Chinese ports. However, if the domestic market experiences a slowdown, we will begin to see a strong effect in the Middle East and the Gulf regions. If the prices of the Mediterranean and the Black Sea also respond to this situation with price adjustments, we may then witness cut-throat competition between Chinese, CIS and Turkish billets in the Middle East and Gulf regions.