Upward moods emerge in ex-CIS billet market after low-price deals

Wednesday, 09 June 2021 17:45:03 (GMT+3)   |   Istanbul
       

Some signs of a price increase have started to emerge in the CIS billet export market on Wednesday, June 9, following some lower-priced deals and generally weak demand seen over the past week in the major sales destinations. More deals, reflecting an increase, are expected to be done shortly, SteelOrbis has learned.

A deal for a sizable volume of 40,000 mt of ex-Ukraine billet has been rumoured as having been done to the Philippines at $638/mt FOB for July shipment, and though there has been no final confirmation of the deal, most sources agree that it is “very possible.” The CFR price is expected to be $698/mt or slightly above, depending on the freight. Bids from China are still low - at not above $670-675/mt CFR as the local price level is Tangshan is at RMB 4,960/mt ex-warehouse, translating to $686/mt, if excluding 13 percent VAT. “I do not expect support from China by the end of the month. CIS exporters will focus on traditional outlets,” one seller said.

Some Southeast Asian suppliers have already started to ask for $720-730/mt CFR in Southeast Asia recently. “CIS prices are stronger now. Russia and the CIS in general have not enough allocation remaining for July and even August,” an Asian trader said.

After a deal at below $640/mt FOB Black Sea and a week-long pause in purchases in most regular destinations, sentiment has already started to improve. Offers from the large mills from the CIS for August shipment have been reported at $660-680/mt FOB, according to a number of sources. Some Russian sellers have been enjoying bigger rebar demand in the local market, so they do not have any excess supply for the billet export market. Also, these mills, who have already started to sell for August shipment, will not be in a hurry and will insist on higher prices.

Only those exporters who were in a rush to sell agreed to provide lower prices at below $640/mt FOB as “sentiment was bearish and credit lines are full,” a trader said.

More inquiries have been seen this week for billet from Latin America with buyers from the Dominican Republic, Colombia, Argentina and Brazil in the market now. Moreover, some better demand may be seen in other traditional destinations like North Africa or Turkey after a pause.

In the Turkish billet market, the mood has been cautiously optimistic this week, taking into account some sizable rebar export sales and the fact that it is believed scrap price levels have bottomed out. Domestic offers have climbed to $690/mt ex-works in the Izmir and Iskenderun regions, while in Karabuk the market players are waiting for Kardemir to open its billet sales and to bring some clarity to the market. According to buyers, the CIS-based mills are now offering $680-690/mt CFR for billet, while traders are mainly trying to sell at $665-675/mt CFR. The average freight to Turkey is estimated at around $17-27/mt depending on the region.

The SteelOrbis reference price for ex-CIS billet has been settled at $638-670/mt FOB with the midpoint at $654/mt FOB Black Sea, up by $10/mt today, after a $6/mt decline yesterday. The lower end of the range reflects the latest deal price level and the tradable level for July shipment cargoes, while the higher end is showing the recent negotiation level from mills for August shipments.


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