Billet prices have been the focus of avid interest during the last fortnight. With the scrap prices on a song escalating by almost USD 70 per tonne to USD 80 per tonne within a span of 1 and a half month its impact on billet was a forgone conclusion.
Turkey being the lynchpin of movements in scrap and billet prices once again proved to be the savior supported by revived buying in Turkey, Far East, Iran and North Africa.
With the current billet market still described as “traders’,” there is a fair amount of stocking up coming from the Middle East, where prices have reached USD 570 per tonne to USD 580 per tonne CFR but are going up fast. However this flare in Middle East is concentrated in selected pockets viz., Turkey, Iran and Egypt etc. Whereas the consumption havens of UAE etc remain untouched owing inherent lack of demand.
Far Eastern buyers meanwhile are seen as raising levels of both enquiries and bids. According to a major trader, there are several hundred thousand tonnes of real demand, some of which is for large consignments of 40,000 tonnes to 60,000 tonnes, at USD 565 per tonne to USD 570 per tonne CFR. Although these levels are still well below the indicated USD 590 per tonne to USD 600 per tonne CFR, going up by USD 20 per tonne in the past week.
The Black Sea billet prices rose by a whopping USD 30 per tonne this week. After concluding USD 510 per tonne FOB last week for the billets, the CIS producers took out offers at those levels from the market and have started to attach higher levels. Latest bookings have been confirmed by market sources to be at USD 535 per tonne to USD 535 per tonne FOB Black Sea. Current offers are standing at USD 540 per tonne to USD 550 per tonne FOB.
The future looks promising with availability of scrap and billets scarce.
It is reported that September production is yet to be sold however the situation will become better with resurgence in buying from Iran and Far East.