CIS square billet exporters have started getting optimistic by the end of this week even though the situation is still uncertain in the market. Suppliers in the Azov-Black Sea ports have been changing their pricing policy often since the beginning of the week, as there have been many reasons to drop prices or to keep them steady. At the same time, accents have shifted again in the market: while over the past month only suppliers in the Azov-Black Sea and Far Eastern ports were raising prices, now their counterparts in the Caspian ports have also got an opportunity to lift quotations. Moreover, owing to long-awaited awakening of Iranian buyers CIS exporters have not only raised their FOB prices in Caspian ports, but also have stopped to grant discounts in Azov-Black Sea region. Export quotations in the Far East have remained largely unchanged over the past week.
Thus, the expected pick-up in demand for square billet in Iran has allowed exporters to try to raise prices to other destinations. Besides, Egyptian buyers have become active. They were out of the market long, but have started buying much material now that the budget is approved.
By the moment, most traders believe that limited availability of the material in Azov-Black Sea region will not only prevent prices from falling further, but also help to bring them back to previous levels. As a result, suppliers remain calm and intend to raise prices for semis in the near future.
Thus, this week billet has been available in the Azov-Black Sea region at $630-645/t FOB, down $10/t w-o-w. However, only Elektrostal has sold billet at $630/t FOB (-$10/t in a week), whereas other producers asked for at least $640-645/t FOB.
Thus, ArcelorMittal Kryvyi Rih, looking mainly at sales of long steel, demand for which has been rather strong lately, has not agreed to ship billet at lower than $645/t FOB. Having estimated conditions in the market, Novorosmetall has quoted $650/t FOB for June casting of billet, being sure that this level will be accepted as soon as next week.
A deal for a 5,000 t lot of semis from BMZ at $648/t, mentioned last week, has not been closed due to the buyer’s refusal. As a result, the material has been sold to the other customer at $645/t FOB.
Offers from Metinvest International S.A. have not been reported yet, since the company has not defined what amount of June billet it will export.
At last, CIS exporters in the Caspian region have sold most of their material to be produced in June, raising prices by $40-50/t from late April. As previously reported, resellers have been paving the way for an increase in prices for semis since early May. As a result, Iranian buyers have unconditionally accepted a lift in prices for June production. After a long silence local buyers have started purchasing much material. It is still far from becoming a pricing trend though, as buyers will probably be more careful about purchasing July production of square billet, which will be offered in Anzali port during Ramadan, after they restock sufficiently.
Noteworthy, June semis from Volga-FEST, REMZ and Ural Steel have been quoted to Iran at $645-650/t FOB ($35-40/t up in three weeks). At the same time, Kazakhstan''s Casting has reportedly offered its material at $640-650/t FOB Aktau ($50/t up over the same period).
Demand for billet in SE Asia is slackening before the rainy season. Thus, buyers from Vietnam, the Philippines, Taiwan and Thailand have adopted a wait-and-see mode after two weeks of active purchases. Buyers think prices have already reached peak levels and sellers will be forced to put their offers down in the future.
Yet, taking into account short supply from Russian mills in Far Eastern ports, pessimistic mood of market players has not been reflected in export quotations of CIS material. Having sold most of June semis, Evraz Holding is reportedly turning down bids lower than $650/t FOB. The latest tender of Amurmetall for billet has been reportedly closed at $645-650/t FOB.
( Source: www.metalexpert-group.com )