Situation with CIS square billet exports has finally improved: suppliers in the Azov-Black Sea region have had luck at last. For reference, two weeks ago market participants were extremely pessimistic as they thought the semis quotations will fall further inevitably. However, major trading companies have saved the situation by opening long positions, as they expect that re-rollers will inevitably become active sooner or later in view of the season. Besides, empty stocks are another reason for them to sign new contracts. Thus, the steelmakers have pushed through an increase by $20/t in a week. However, it is still unclear whether this rise will turn into an upward trend, as end-users still show slack demand. Moreover, suppliers in the Caspian region and Far East are in the difficult situation, as sales are slow and they have to put much effort to raise prices.
In particular, while last week not all the producers closed their April order books and some of them sold billet at Azov-Black Sea ports at $580-595/t FOB, this week the material has been changing hands at $600-615/t FOB. Those suppliers, who left the market unwilling to sell semis below $600/t FOB, have become much more active and plan to lift their transaction prices to at least $610/t FOB next week.
Market participants report, Metinvest Internation S.A. made the latest deals on April casting at around $600/t FOB and has been selling May production of semis at $605-610/t FOB this week. IUD has lifted its offers by $10-15/t after it sold its billet to be produced in late April-early May at $600-605/t FOB.
At the same time, ArcelorMittal Kryvyi Rih has been most successful: the company has been raising its prices for the third week in a row, by $10/t each time. The supplier has reportedly sold its billet to Turkey at $615/t FOB.
Notably, the latest two deals on May production from Elektrostal (Kurakhovo) have been made at prices by $15/t higher than at the beginning of last week. Besides, market participants report that Belarus SW intentionnaly overpriced its "May" square billet and then closed sales with a $40/t reduction.
CIS square billet exporters in the Caspian region are not satisfied with the sitution, as Iranian buyers show almost zero activity. The latter consider new purchases unfeasible, as port stocks are still high. Kazakh suppliers cannot stir them up, no matter what they do. Casting and KazFerroStal faced strong buyers' resistance when they announced new prices for May casting of square billet at $630/t CPT Aktau ($640/t FOB Aktau) last week. As a result, they have been forced to drop quotations by $35/t after negotiations. Nevertheless, Iranian buyers consider current prices too high as well and insist on another cut by $5-10/t.
At the same time, Volga-FEST's square billet is still offered to Iran at $605-610/t FOB Astrakhan for May production, unchanged w-o-w. Besides, offers of Ural Steel's material are coming at $620/t FOB Makhachkala at the moment, $5-10/t up from late March. The producer also offers May output.
CIS square billet exporters have had to reduce their prices in the Far East too. Demand for semis in the south-eastern region is still not strong, as finished product prices are low in the domestic markets. As expected, EvrazHolding has opened sales of May material at about $645/t FOB ($15/t down m-o-m). Results of the latest Amurmetall's tender have not yet been announced, but market operators expect the producer to drop prices by $10-15/t from the level of the most recent deal ($635/t FOB).
Noteworthy, offers of Russian mills are unworkable in some countries (Philippines and Taiwan, in particular). For example, no Philippine buyers are ready to buy Russian square billet at $690/t including 3% import duty, as rebar is priced at $710-730/t EXW in the country now. All domestic prices are given on actual weight basis, excluding VAT. Taiwanese buyers also ignore offers of Russian semis at $670/t C&F ($645/t FOB), considering that domestic prices for rebar are at $670-680/t EXW, and those for square billet – at $620-630/t EXW. Selling billet to South Korea is no option for CIS exporters, as the country exports the semis. Besides, domestic prices for square billet are at $650-655/t delivered. Thai re-rollers, who actively purchased CIS semis in the first half of April at $605/t FOB Black Sea, are also reluctant to sign new contracts.
Despite the fact that demand for square billet has got firmer in Vietnam, the buyers are still careful about purchases as the prices are not quite attractive for them. They can buy square billet at $665-670/t C&F and so insist on a drop of at least $10-15/t.
( source: www.metalexpert-group.com )