Will high CIS and Turkey billet prices leave others into Mediterranean?

CIS billet offers have continued their upward trend this week as well. Ukrainian billet offers are in the range of $450-460/mt FOB Black Sea for late March / early April shipments. Indeed, offers have been heard up to $470/mt FOB towards the end of the week. Some producers are even reported to have concluded sales at this level. The billet demand in the Middle East and North Africa has provided support for CIS producers to increase their prices. CIS producers, who used to complete sales from their warehouses in previous years, have reduced warehouse sales since the second half of 2006, and are now concluding all sales direct from production. Russian billet offers do not appear to be competitive in the Mediterranean and Middle East due to the levels of Russian billet sales to Iran and also Russia's relatively strong domestic market. The EAF mills in the Turkish market are offering billets at $500-510/mt. Turkish mills Isdemir and Kardemir's billet sales are now closed. However, their billet sales are expected to resume above the level of $490/mt. There is not so much billet available for export at the moment. Turkish producers have directed their sales to the domestic market. Local billet prices in Italy have been unable to match the expectations for a rise. Therefore, the rolling mills there are not interested in import billet offers. The offers from Ukraine are at $490/mt and above for late March and early April shipments. Market players in Italy are expecting both billet and long product market prices to pick up seriously in February. Chinese and Brazilian sources are being mentioned in the Mediterranean and Middle East markets due to the sharp rise in CIS and Turkish billets. However, Brazilian offers for the Mediterranean are higher than $500/mt CFR. Meanwhile, Chinese offers for the Middle East are at $490/mt CFR. While the rolling mills in the Mediterranean and Middle East consider that billets for April delivery are a little late, they are not interested in alternative source billets, which are high-priced and will arrive in May at the earliest.