Sentiment in the export market for square billet is getting gloomy. Back in end-September sellers from Azov-Black Sea basin still hoped to put prices up, but now quotations continue their fall. Demand from re-rollers in the Middle East has not improved yet – only steel traders are buying the material to resell it later. There are only few offers of CIS billet in the Caspian region. Besides, demand for semis has dropped temporarily, since the products booked earlier will be delivered to ports soon, while the outlook for longs segment remains vague amid increased interest in imports. There are not many CIS suppliers in the Far East either. Nevertheless, prices for CIS semis continue moving down, following the trend in the region.
At the same time, Azov-Black Sea market is still seeing a stand-off between producers and buyers. Although some mills have already tabled prices for November output, some sellers still have October billet available. For example, ArcelorMittal Kryvyi Rih and Metinvest International S.A. are in no hurry to make reductions and thus stay away from the market, monitoring the situation. After selling billet at $630-635/t FOB a week earlier, ArcelorMittal Kryvyi Rih starts offering at this level now and refrains from sharp moves so far. Metinvest International S.A. behaves in a similar way, having sold billet to Asia at about $630/t FOB Black Sea in the first week of October. Other suppliers are more active, which makes them adapt to current market conditions.
Russian and Ukrainian mills will hardly recover their losses shortly amid started fall in prices for steel scrap in the CIS. In such conditions, market players forecast the workable level will drop to $600/t FOB in the Azov-Black Sea basin already next week.
Belarus SW, who started offering November square billet at $630/t FOB in early October, has failed to reach desired levels and sold most of material (some 30,000 t) at about $610/t FOB. So, the supplier has set prices for the rest of the volumes at $610-615/t FOB.
Electrostal has also come to the market offering November square billet. However, the level of $635/t FOB Mariupol has not been accepted. Moreover, while the initial bids were $620/t FOB, by the end of this week buyers have preferred to adopt a wait-and-see attitude. The supplier reportedly had 5,000 t of October square billet in the first days of October, which was sold at $610/t FOB. IUD has also opened its November order book. Thus, it has sold 30,000 t of square billet to Litat Group at $620/t FOB, which is $10-20/t lower than the prices of deals for October production.
Novorosmetall, who offered October casting of square billet at $640/t FOB last week, has finally sold 5,000 t at $615/t FOB ($635/t C&F) in the Turkish market. Metalloinvest has also closed its October order book, having sold the remaining 10,000 t at $615/t FOB. According to Metal Expert, one of the deals was made with Egyptian re-roller.
As for the Caspian region, the prospects of CIS square billet suppliers remain uncertain in view of extremely weak demand for longs and sliding domestic prices for finished steel. As a result, some sellers have started making reductions expecting no improvements in the situation. For example, Aktau foundry (Kazakhstan) reportedly sold about 6,000 t of November square billet at $650/t CPT Aktau, by $25-30/t lower than offer prices recorded in late September. At the same time, local traders still can buy October output of OEMK from distributors at $690/t FOB Astrakhan, like a week ago, but this level is obviously too high. Other suppliers are staying inactive so far. Kazakhstan’s Casting plans to sell some 70,000 t of November production to Iran and will not announce prices until the middle of the month. November semis output from KazFerroStal (6,000 t) as well as October material from Baku Steel (5,000 t) will be available only in the second half of October.
Given that regional suppliers, in particular South Korean ones, are cutting quotations in the Far East, CIS exporters’ positions keep weakening. No wonder, Amurmetall, who failed to sell 10,000 t of square billet at $653/t FOB in late September, has closed a tender this week at $642/t FOB. Having sold out November casting at $670/t FOB ($690-695/t C&F) two weeks ago, Evraz Holding is staying out of the market so far.
(Source: www.metalexpert-group.com )