Billet prices had shown an unusual appreciation during the last 1 month to the tune of USD 70 per tonne to USD 80 per tonne. The main propellant was the massive rally in scrap prices to the tune of USD 100 per tonne to USD 120 per tonne and the active pre Ramadan restocking. The unusual surfeit in billet prices had a cascading impact on the rebar prices as well giving the long product market straw to cling on.
The CIS billet export market had come to a standstill, having reached offer levels of USD 540 per tonne to USD 550 per tonne FOB Black Sea last week. The market has reached impasse with sudden vacuum in the absence of offers and transactions.
The mills have gone in hiatus showing reluctance to give lower offers as they are skeptical about bookings at those levels. Moreover post Ramadan when Middle East and European markets open revival seems a strong possibility.
September typically is a month of low prices when panic selling sets in after August when mills are eager to offload surplus volume. However this year will be unusual as available tonnages have been lower during the summer owing to curtailed production by mills and active pre-Ramadan booking.
However after a relapse the market is expected to resurrect in the second week of September keeping the chips afloat in Q4.