CIS square billet producers have decided to keep pushing prices up in the Azov-Black Sea region, willing to make up for two-month low sales. Sellers do not plan to slow down, and resort to some manoeuvres in order to stir buyers up. In particular, most producers report the market sees a shortage of semis to be produced in May, and inform that they do not want to be in a hurry with offers of June output. Moreover, some mills set initially too high prices, unwilling to discuss lower levels. Turkish exporters also lift quotations actively, quoting billet at $640-650/t FOB (by $20/t up in a week), which plays into the hands of producers as well.
In the Far Eastern market, CIS suppliers have managed to raise sales and prices as a result. However, offers of CIS billet sellers are weakened by the fact that there are no reasons for a price increase in the Caspian region so far. Although Iranian re-rollers show somewhat higher interest than before, they are struggling hard to knock down prices and are unready to accept the idea of a possible trend reversal.
The situation in Iran as well as in the whole Middle Eastern region remains generally not to the sellers'' advantage, and thus quotations are going up there mainly thanks to support from the CIS and Turkish mills as well as traders. Yet, semis stocks are running out, but demand for finished longs, especially for rebar, is still slack in local markets, so suppliers'' upward moves may be just a short-lived price upturn.
Besides, customers from different countries show different demand: those from Turkey, UAE and Saudi Arabia express moderate interest in the material, waiting till the situation becomes clear, while Syrian re-rollers have stopped buying. Egyptian consumers, to the contrary, have become more active for the first time after a long break. However, the latter are not active enough to support the trend. Therefore market operators still rely on Iranian buyers, who they believe may resume purchases soon. If this scenario takes place, semis supply will be distributed among the Black Sea and Caspian ports, which is rather favourable for sellers and will help to move prices up to higher levels although current demand levels are unusual for this sesason. Noteworthy, CIS sellers have been waiting for such market developments for at least the past two months, and they have had to even cut exports to Iran, putting more pressure on the Black Sea ports.
In particular, having sold most of May semis, exporters have managed to increase transaction prices by $10-15/t, to $610-630/t FOB, over the week. Notably, buyers were losing interest in deals at $610/t FOB, and thus producers considered a level of $615/t FOB as the minimal one by mid week. Currently, only Metinvest International S.A., Evraz Holding, Mechel and Novorosmetall have small volumes of available semis of May production, while others have filled up order book and left the market. The latter plan to start offering June output by mid May.
Market players report the latest deals for the products from IUD have been closed at $620-630/t FOB. By the moment the company has collected enough orders for May, and is in no hurry to offer June production amid the uptrend. At the same time, billet from Metinvest International S.A. was sold to Europe and North Africa at $615-620/t FOB. Moreover, Metalloinvest reportedly sold billet from OEMK and Ural Steel to Turkish and European re-rollers at $615-620/t FOB.
Notably, after traders at the Azov-Black Sea ports started restocking last week, prices have gone up immediately. Traders selling material to Iran, have followed them. However, given weak domestic market for finished longs, they have failed to stimulate a growth of semis quotations at the Caspian ports, and, moreover, some suppliers have even had to step back.
In particular, May output of square billet from Russia’s Ural Steel was sold at about $605/t FOB, by $15/t lower than initially announced levels a week ago. Deals for small volumes of the material from Russia’s Volga-FEST were made at $605/t FOB compared to offers made in mid April at $605-610/t FOB. Casting (Kazakhstan) has also made reduction and sold large amounts of May output at $590-595/t FOB ($5/t down from the lower end). A deal for 10,000 t of square billet to be produced in late April-early May from Aktau LPZ to Iran has been reported at some $610/t FOB.
Demand for CIS semis has got stronger considerably in the Far Eastern market. So, customers from the Philippines, Thailand and Taiwan have became more active and signed several contracts over the past week. However, as Evraz Holding managed to sold out May production two weeks ago at an average of $645/t FOB ($670/t C&F), and Amurmetall now offers small volumes, only traders are able to take benefit from the situation, selling material mainly at $660/t C&F ($635/t FOB). Vietnamese buyers, in turn, are still careful, but are likely to resume purchases soon.
Nevertheless, sales of May billet from Amurmetall (about 20,000 t) have been reportedly closed at about $640/t FOB.
( Source: www.metalexpert-group.com )