CIS square billet exporters are still facing extremely weak buying activity in most target markets. Producers from Muslim countries have left the market for Ramadan, Europe ones are on holidays. Almost non-existent buying activity in the Azov-Black Sea region makes it more difficult for suppliers to keep prices for September material unchanged despite its limited supply. A downward trend started in the segment for longs will evidently depress semis quotations soon. Iranian buyers still refuse to accept billet quotations, considering them too high. This week only traders have been active in the Caspian region. At the same time, no offers of September production are available there. Some steelmakers have managed to close September order books and start selling October material on the back of stable demand for square billet in the Far East.
In mid-August export quotations for Turkish longs have started falling resulting in a drop in those for CIS material, thus aggravating unfavourable conditions in the semis market. Last week overly optimistic suppliers were offering their billet at $690-700/t FOB, but have abandoned this level by now. Nevertheless, manufacturers are in no hurry to offer discounts keeping their nominal prices at $680-685/t FOB at a lack of deals. Only Metinvest International S.A., Elektrostal and Belarus SW have an opportunity to offer September billet this week. Mechel is still out of the market, the date of the commissioning of its steelmaking facilities is yet unknown.
Noteworthy, Belarus SW continues talks, after it announced initial prices for square billet at $699/t FOB. The supplier will surely have to cut its quotations amid such unfavourable market conditions. It is expected that the material will be sold at prices at least $15-20/t lower.
Situation in the Caspian basin remains tense because Russian material is unavailable. Moreover, it is still unknown whether the leading supplier of semis here,Ural Steel, will offer September billet. There is a threat that the supplier will sell the whole volume of merchant square billet to the Russian domestic market, like last month. REMZ and Volga-FEST are not offering the products due to the emergency stoppage of their steelmaking facilities.
Meanwhile, Casting (Kazakhstan) is still selling August output. The supplier has reportedly offered additional 15,000 t of merchant semis planning to sell the volume at no lower than $650/t CPT (about $660/t FOB) Aktau. The company is going to start offering September production in the second half of August.
According to Metal Expert’s data, August square billet from Baku Steel (about 5,000 t) is quoted to Iran at $660/t FOB ($10/t up in a week).
Large trading companies have recently become the main billet buyers in the Caspian region booking the material in advance, while Iranian customers have been inactive refusing to accept a price rise which was inevitable on short supply in this market. Notably, traders have started destocking actively at the Caspian ports lately. It means that inventories at the Iranian port Anzali have dwindled greatly as local rerollers have been sourcing semis from the domestic market for a long period of time. Given lower stocks in the country, Iranian traders and producers will have to import the material very soon. Moreover, reports about intentions of the Iranian government to increase semis imports also bring some optimism.
Meanwhile, exporters from the Far Eastern ports are satisfied with demand from SE Asian buyers. For example, Evraz Holding has closed sales of September square billet (about 80,000 t) at $675-685/t C&F ($650-660/t FOB) and started offering October casting. The most recent deal prices were at $680-685/t C&F ($655-660/t FOB). Amurmetall, in turn, has not been offering billet since late July. Market players believe this is due to the fact that the supplier is experiencing some financial problems and difficulties with raw material supply.
( Source: www.metalexpert-group.com )