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Kallanish Kallanish

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January, 16th 2021

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SEP 15

CIS billet mills peg offers, despite absent demand


The Black Sea billet export market remains in stasis, as buyers are watching Turkish scrap import price development. But with mills' October-casting books almost closed, their offers remain at $420-425/tonne fob Black Sea, with no apparent intention to lower them to achieve sales, trading sources tell Kallanish.

This has led to a stalemate, with no sales of CIS billet concluded in the last week from the Black Sea. Buyers are making enquiries, traders say, but after hearing offers at the same level, they withdraw.

Turkey has also not been heard booking any billet in the last week. Scrap price weakness is anticipated and rebar sales have also slowed a little, as sellers anticipate the new European quota period to open on 1 October. Some traders do not anticipate any activity at all in the CIS billet export segment until 1 October, until buyers have an indication of scrap and rebar price dynamic.

There is also the dampening influence of China's slowdown in billet imports and softer pricing. Although Russian billet producers shipping from Far Eastern ports are still selling to wider Asia, there were no sales to China for over a month, due to lower prices. Southeast Asia does pay $450/t cfr ($410/t fob) but this trade is well balanced with supply from the region, and thus far has no place for ex-Black Sea billet, especially at a minimum of $420/t fob, one trader explains.

China could book at $435/t cfr, but netting back to $395/t fob Black Sea, it is not an option for sellers right now. China's withdrawal from the market on the back of increasing stocks and a deteriorating futures market in the past week are considered as temporary by some sources. They expect the country's billet importers back in the market in early October.

Egypt is stirring, meanwhile, with rising rebar prices and low stocks of billet in ports meaning buyers are watching the market for bookings. Traders say $430/t cfr would work, but considering all the duties and taxes, CIS sellers’ offers need to decline by around $60/t in order to make it work.