CIS square billet exporters have been following their goal to reach a price level of $650/t FOB in the Black Sea basin for two weeks. So, suppliers keep supply tight, and sell products in limited amounts, thus heating up the market. However, semis prices are growing much more faster than they expected: quotations have been adding an average of $20/t weekly since mid April. Nevertheless, the situation in other sales markets is not so favourable. For example, while in the Far East producers have managed to raise offers by $10/t over the past week, suppliers in the Caspian region see no increases so far.
Turkish exporters systematically raise semis prices, supporting the upward moves of CIS mills selling from the Azov-Black Sea ports. In particular, current offers of Turkish billet are at $660/t FOB ($10-20/t up from late April).
Notably, producers have managed to spur buying. They have taken benefit from an upturn in demand for billet with immediate shipment saying there are no available volumes of May output. Most suppliers are currently staying away from the market, estimating the current situation, and are in no hurry to offer June casting.
So, Ukraine’s ArcelorMittal Kryvyi Rih has opened sales of June production of square billet this week with a deal at $640/t FOB. Nominal prices for billet from Belarus SW (about 5,000 t) stand at $635/t FOB, 100% pre-paid.
The latest deals for May output from Metinvest International S.A. have been closed at $640/t FOB. Besides, a trading company is rumoured to have bought 5,000 t of May casting from Novorsmetall at $645/t FOB for future sales. However, this information has not been confirmed.
Given better demand for semis in SE Asia, Russian mills, selling material from the Far Eastern ports, have also become able to strengthen their position. So, Evraz Holding has set prices for June output of square billet at $650-655/t FOB, by $5-10/t up from mid April. Noteworthy, supply is limited now (about 30,000 t) due to orders left from the previous months, thus it is unreasonable to wait for considerable discounts while making deals. At the same time, Asian consumers are in no hurry to do business at new levels, bidding by $10/t lower.
Nevertheless, the situation in the Caspian region runs counter to the general uptrend. Suppliers are trying hard to stir Iranian buyers up by a shortage of the material offered, but see no results so far. Although May casting has been booked and June one is not offered, demand for CIS billet remains weak. Nominal prices for CIS semis remain at $605-615/t FOB.
If the current situation continues in the market, Russian sellers will have again to redirect the material from the Black Sea ports to other destinations.
( Source: www.metalexpert-group.com )