CIS billet consolidates on higher costs, low availability
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Black Sea billet export offers remain sparse, despite ongoing support for higher prices from scrap’s stable-to-rising trend, as well as a genuine increase in enquiries for Russian billet this month.
Since the EU included in its latest sanctions a grace period for imports of semi-finished steel from Russia, more buyers appear to be willing to consider Russian material, market participants tell Kallanish.
Russian billet suppliers are largely absent from the market at present, as some claim to be sold out until December-loading availability, while others are selling on a shorter-lead-time, higher-price basis. Russia’s domestic market for long steel products also appears to be relatively robust. Coupled with output restrictions being implemented, this means mills are running with two-month lead times, unless they prefer to sell on a prompt basis, market participants say.
Offers of Russian billet largely circled $590-600/tonne cfr Turkey for small prompt lots, sold at around $590-595/t cfr, netting back to $550-555/t fob Black Sea. This is roughly in line with $540-550/t fob for longer-lead-timed offers two weeks ago, which resulted in sales at around $530-540/t fob, closing one mill’s books until December. Another, EAF-based mill's offers at $560/t fob for November-loading material earlier this month were not successful, while small lots of eastern Ukrainian material at $500-510/t fob were partially accepted.
Demand remains relatively stable in Turkey, almost non-existent in Egypt, and tentative in other Middle East/North Africa destination, largely hinging on price and freight rates. There is also stable but sparser business to the Gulf Cooperation Council, at lower prices, as much larger volumes are sold there and the competition is stronger, with alternative supply available from Asia and the region. Higher freight rates are also pressuring sellers to remain mindful of fob price flexibility, squeezed on the other side by ever-rising costs, traders note.
Overall, with scrap exceeding $370/t cfr Turkey for premium HMS 1/2 80:20 material, both Russian and Turkish billet prices are supported, with the latter now far in excess of the $600/t available in late September. No firm offers from Turkish mills were heard in the past week, but indications are at $620-630/t fob Turkey, while domestic offers are already pushing $640-650/t ex-works, market sources conclude.
Katya Ourakova UK