The CIS export market for square billet has become bearish, but suppliers stand firm. A number of sellers in the Azov-Black Sea region were forced to back down in the first half of this week to fill their October order books. However, some exporters have still refused to yield to buyer pressure amid firmer demand in Syria, Lebanon and Jordan, even attempting to push through a price increase. At the same time, traders become increasingly interested in buying semis in the Caspian basin, so part of square billet volumes has been redirected from the Black Sea ports there. At the same time, supply of CIS square billet remains limited in the Far East. Nevertheless, CIS suppliers have been unable to keep prices steady, while fiercely competing with Asian suppliers.
Meanwhile, suppliers in the Azov-Black Sea basin have managed to sign more contracts for square billet this week. However, the material is still purchased mostly by traders and transaction prices have fallen at least $20/t in a week. In particular, Elektrostal has already closed its October order book, having sold leftover volumes at $630/t FOB Mariupol, against $650/t FOB Mariupol early last week.
ArcelorMittal Kryvyi Rih has reportedly supported the level of $640/t FOB with deals, which is by $20-25/t lower than last-week offers. However, at the end of the month the supplier has started to insist on a lift to $650/t FOB, intending to avoid the further price rollback. Metinvest International S.A. is also in no hurry to cut prices, offering small lots of Makeyevka SW's billet produced in October (some 10,000-20,000 t) at $650/t FOB. Nevertheless, the supplier still can grant a discount of $5/t while signing deals, traders report. IUD is currently out of the market, analyzing the situation and deciding on new prices.
In the meantime, BMZ, who wanted to sell the remaining 5,000 t of October square billet at $620/t FOB, has canceled the deal, and lifted quotations to $640/t FOB. Market players say the supplier intends to stick to that level and will offer the semis later together with November production in case buyers resist.
Russia's Novorosmetall has returned to the market, offering some 10,000 t of October casting, in view of deteriorating demand for rebar in Russia. Initially its prices were set at $655/t FOB, but now the supplier insists on the level of $640/t FOB. However, no deals have been reported so far.
Metalloinvest has sold 20,000 t of square billet to be produced by OEMK in October to the Middle East at $645/t FOB, and re-directed some 20,000 t of the material to the Iranian market.
Market players say traders find the level of $630/t FOB ($645-650/t FOB a week ago) working one, given the fact that buyers from the Middle East and North Africa are not ready to pay higher prices.
More and more offers of CIS material appear in the Caspian region amid growing demand from traders. In particular, OEMK’s October casting of square billet is available from a distributor to local traders at some $690/t FOB Astrakhan. Besides, 30,000 t of Ural Steel's October output of the material has reportedly been sold to Iranian end users at $720/t FOB Astrakhan, including the margin. At the same time, Kazakhstan’s Casting has already closed October order book with a last deal for 10,000-tonne lot at $680/t CPT ($690/t FOB) Aktau, cash payment, only $5/t down from week-ago deals. The producer will decide on November production volume as well as on new prices in the first week of October. Besides, 6,000 t of October casting from Aktau foundry is available at the above level, which is by $30/t higher than a week ago.
The position of CIS exporters has somewhat weakened in the Far East since regional suppliers, including South Korean ones, reduced prices. Amurmetall has cut prices at a tender for square billet by $20/t as compared to the level of the latest deals, to $653/t FOB, but no bookings have been made. Sales are expected to be resumed next week. Evraz Holding, having sold November output at $670/t FOB ($690-695/t C&F) a week ago, is staying out of the market now.
( Source: www.metalexpert-group.com )