Weak demand causes ex-CIS billet prices to fall

At the beginning of the current week, ex-CIS billet prices to the export markets were still at $390-410/mt FOB, the same price levels they had reached last week. However, demand for ex-CIS billet in the international markets has declined further since the beginning of the week and is now sluggish. As a result, CIS-based suppliers' billet offers to the export markets started to move down in the middle of this week and are currently at $385-395/mt FOB.
 
Turkish steel producers usually conclude billet purchases within the scope of Turkey's inward processing regime (under this scheme mills have to give a commitment to export the finished products they produce from imported billet). Since Turkish mills' finished steel sales both in their domestic and export markets are weak, demand for ex-CIS billet in Turkey is currently at low levels. Meanwhile, CIS-based suppliers' billet offers to Turkey have declined by an average of $10/mt week on week to $400-410/mt CFR.
 
Also, demand for locally produced and import finished steel in Egypt - another important export market for CIS-based billet suppliers - has been at very low levels. Market sources state that Egyptian buyers' expectations for a further decline in ex-CIS billet prices have strengthened, while they consider current offers from the CIS region to be unattractive. In the current week, ex-CIS billet offers to Egypt have declined by an average of $12.5/mt week on week to $400/mt CFR.