The situation in the square billet market is still unfavourable for CIS exporters. There has been no seasonal pick-up in demand producers expected, while the recent euro devaluation has considerably affected CIS exporters’ positions. However, most producers doing business in the Azov-Black Sea basin and in the Caspian Sea continue to be in a wait-and-see mode, hoping the situation will become clearer soon. In the Far East, demand begins to recover gradually, which helps quotations for Russian billet to rise.
European semis have recently become more attractive in the Mediterranean Sea ports. For example, square billet from South European producers is now available at EUR 490/t ($676/t at the exchange rate EUR 1 = $1.38) FOB. To compare, at the end of last week and the beginning of the current one deals for the products were made at EUR 470-475/t ($642-649 at the exchange rate EUR 1 = $1.366).
Since there is cheaper material, CIS square billet buyers have had to take a wait-and-see attitude, and many of them have started using this strategy to put pressure on suppliers. Moreover, customers’ bids are coming at $645-650/t FOB, while last week traders were ready to sell the material by at least $20-25/t higher.
Thus, on September 5 Belarus SW opened sales of October square billet at $680/t FOB Odessa, though could not avoid reductions. Although seller reported contracts signed at the announced level, it has given a $15/t discount by the end of this week. Market players say the Belarusian supplier has some 10,000 t of billet left, which it plans to sell also at $665/t FOB.
However, other sellers continue to maintain prices. ArcelorMittal Kryvyi Rih has been reported to call off offers, because it has decided to redirect Ukrainian square billet of October production to in-house companies. IUD and Metalloinvest have not come back to the market yet, intending to set prices and volumes of October material next week.
CIS square billet suppliers who work at Caspian ports are still out of the market, and only re-sellers offer the material (that of last months’ production). Nevertheless, Baku Steel (Azerbaijan) and Aktau Foundry (Russia) are expected to offer September material (5,000-5,500 t each) next week, while Ural Steel (Russia) and Casting (Kazakhstan) will start selling October products. The last company has already announced a $15/t increase, though it may not manage to implement the reported hike and prices will stay the same.
In the Far East, CIS suppliers have even firmed raised quotations somewhat, amid stronger demand for semis in SE Asia and limited offers of Russian products. Metal Expert has learned Evraz Holding has succeeded in selling most of its November billet at some $670/t FOB ($690-695/t C&F), which is $10-20/t higher than a month ago.
( Source: www.metalexpert-group.com )