Buying activity in the CIS export market for square billet has slowed down by the second half of July. Most steelmakers have closed August order book, and only a few of them have started offering September output. As a result, short supply is observed in all markets, but only some players have managed to take advantage from the situation and push prices up. So, quotations of billet have practically remained the same at the Azov-Black Sea ports over the past week, while interest in the material is shown only occasionally. Iranian buyers also stay inactive so far, but some sellers have raised prices successfully. The Far Eastern market, on the contrary, has seen an upturn in demand for semis, and amid limited supply of Russian mills’ material quotations have leaped.
Notably, despite low buying activity in the Middle East and North Africa, export prices for square billet from the Azov-Black Sea ports have not fallen only thanks to the fact CIS mills maintain short supply of the material, while stable demand for rebar is observed in Turkey. However, given coming Ramadan in the Muslim countries, the prices will slide soon.
Meanwhile, like a week ago, CIS billet quotations stay at $670-680/t FOB. Yet, few deals were made at $680/t FOB a week ago, and currently this level can hardly be reached. Market players say buyers are ready to pay by at least $5/t less. Nevertheless, suppliers continue to maintain offers of 125-130 mm square billet unchanged amid current speculation. So, Elektrostal has entered the market with offers of September output voicing the level of $680/t FOB Mariupol as an initial one. At the same time, as the supplier requires 100% pre-payment, no one accepts more than $670/t FOB Mariupol. Having started sales of 125-130 mm material at $675-680/t FOB last week, the seller of billet from Yenakievo, Metinvest International S.A. has already sold most of August output by the moment. At the same time, deals for 150 mm products were made by $10/t lower.
Moreover, 150 mm billet from OEMK and REMZ was reportedly changing hands at $665/t FOB in the Turkish market, which is the main sales destination for the products. However, demand for it has slackened greatly by now, and the highest price level to close a deal at is $660/t FOB.
There is an acute shortage of CIS semis of August production in the Caspian region: only Kazakhstan’s Casting can sell the material now. At the same time, all export volumes of square billet from Ural Steel (about 70,000 t) traditionally destined for Iran were sold in the domestic market as a single delivery to NLMK which is having production problems. A seller of REMZ billet has reportedly managed to close sales at $660-665/t FOB ($10/t up from the latest deal prices for July output).
At the same time, Casting (Kazakhstan) has decided to be more careful and started offering semis at $645-652/t CPT (about $655-660/t FOB) Aktau. As previously reported, most of July production from the mill was booked at $645/t CPT ($655/t FOB) Aktau. The supplier will probably revise offers upwards seeing no competitors in the market. Market operators report no deals for square billet from Casting.
Despite expectations of Middle Eastern players, demand for semis has not weakened during the rainy season, but even got stronger. Expecting the autumn surge in construction activity, Asian re-rollers have decided to restock, while traders – to book the material for long perspective. Besides, quotations of longs keep growing in SE Asia, supporting the increase in square billet ones.
So, amid limited supply (Evraz Holding has filled up order book of billet to be made in August at $640-660/t FOB) Russian material has become much more expensive over the week. In particular, the most recent tender of Amurmetall was closed with a sale of August billet (some 10,000 t) at $665-670/t FOB, by $15-30/t higher than the latest deal prices for July output.
( Source: www.metalexpert-group.com )