Black Sea region billet offer prices were little changed this week but interest from buyers dropped ahead of Ramadan which will slow down construction activity in key import areas.
Traders quoted Black Sea billet offers at $660-675 a tonne free-on-board (fob) Russia and Ukraine, a similar level compared to last week but interest from buyers at this price levels was much weaker than earlier this month.
"Nobody is willing to pay more than $650 fob for Ukrainian material," said a source at a Turkish steel mill. "With Ramadan in August consumption will go down so nobody is willing to buy anything unless it is delivered after Ramadan." Billet, a long steel semi-finished product is mainly used in construction.
During Ramadan, workers is Muslim countries will be fastening and this, coupled with hot weather, will slow down construction in Northern Africa and the Middle East.
"Other importers are also scared to buy as they think Ramadan will affect the market," the steelmaker added.
Although demand was poor, Russian and Ukrainian producers did not cut their offers.
"Russian and Ukrainian producers have long lead times so they are not much pressure to sell," said a UK-based billet trader. "But there is not a chance to sell at $675 level."
Due to high volumes sold in the past few weeks, Ukrainian and Russian producers are now offering material for August delivery at the earliest.
Sluggish demand, however, pushed Turkish producers to cut their offers for rebar.
Offers for rebar fell to $725-735 per tonne fob from $760-780 per tonne fob Turkey earlier this month and are likely to fall to $720 fob soon, steelmakers and traders said.
"The market is going down," said the trader. "The sentiment is more bearish than in the last couple of weeks." On the London Metal Exchange, the benchmark billet contract FMD3=LX was at $557/$560 a tonne, from a close at $536 a tonne last Monday.