CIS exporters of square billet enjoy successful end of May: they have already sold out June production, and others have even managed to sell July output, market players report. So, after a slight drop in mid May, quotations have reached their peak again ($10/t up in a week) in the Azov-Black Sea basin. At the Caspian ports, prices also keep going up, but at slower pace: while a week ago they added $40-50/t, this one the growth has been just $5-10/t. At the same time, quotations of semis have started falling (10-15/t down over the same period) in the Far Eastern market due to weaker demand ahead of the rainy season.
However, some market players believe the upward trend at the Azov-Black Sea and Caspian Sea ports will be short-lived, and prices may decrease by mid June. Ahead of the holiday season in Europe and Ramadan in Muslim countries, buyers are expected to become less interested in deals, which may lead to a decline in semis quotations. Yet, given that some mills plan to repair production facilities in summer as well as amid considerable in-house supplies, export volumes will be limited. Thus, even if prices slide, it will probably be just insignificant rollback. In the Far East, players make even more pessimistic forecasts: semis quotations have started moving down and summer increase in demand and prices is unlikely due to rainy season.
Nevertheless, under current conditions, an upturn in demand in the Middle East and North Africa has allowed suppliers from the Azov-Black Sea ports to fill up June order book at higher prices. Besides, they have started offering July output. So, while a week ago deals were made at $630-645/t FOB, now contracts are signed by at least $10/t higher. Noteworthy, only few sales were closed at the level of $640/t FOB. In particular, just 5,000 t of billet to be produced in July from Electrostal were sold at that level. At the same time, the company signed next contract at prices by $5/t higher, and it reports that orders for July production have been collected. June output of square billet from Evraz-Petrovsky was sold at $640-645/t FOB in the first half of May.
( Source: www.metalexpert-group.com )