Sentiment in the CIS billet market has improved this week. This is connected with mills’ refusal to sell more cheaply as some of them have already sold a part of August production billet, on the one hand, and with some slight increase in scrap prices in Turkey, on the other hand.
Offers from the majority of big CIS-based mills have been heard at $370/mt FOB, while some of them can give $365/mt FOB, sources have said, but no lower level has been heard this week. The tradable value has been assessed at $360-365/mt FOB versus $360/mt FOB on average last week, according to SteelOrbis. “I am not sure about an improvement in the future, but the market is unlikely to keep weakening,” a Russia-based seller said.
There has also been a smaller number of offers in the market this week, as the mills which partly sold out August production order books have been evaluating the situation. The latest ex-US scrap price increase by $2.5-3/mt, reported by SteelOrbis yesterday, has also supported sentiments in the billet market.
This week, Turkey has been rather actively inquiring about small billet lots, mainly from traders for prompt shipments. Offers for July-August shipments have been ranging mainly at $375-385/mt CFR depending on the region and the seller. However, the buyers are not expected to pay above $375/mt CFR, which corresponds to slightly above $360/mt FOB, SteelOrbis estimates. The slight increase in import scrap prices in Turkey is one of the reasons for the livelier inquiries. In addition, the availability of billet in some regions of Turkey has been limited.
Some interest in large billet cargoes still exists in the GCC with at least two mills considering entering the market soon to buy for September deliveries. For now, buyers continue to watch the market and are getting offers closer to $365/mt FOB on average.
In the Asian market, billet prices from the Black Sea region have not been workable. Bids have been mostly at $395-400/mt CFR in Southeast Asia, which, taking the increased freight rate at $40/mt, translates to $355-360/mt FOB. This level is $10/mt below what exporters can offer now.
The SteelOrbis reference price for ex-CIS billet has increased by $2-3/mt from last week to $360-365/mt FOB.