CIS exporters keep maneuvering amid weak buying activity. This week billet suppliers have succeeded in raising their offers at ports of Black Sea ($5-10/t up) assuring buyers that rise is for long, while in the Caspian Sea region and the Far East they were not so lucky due to current market conditions. However, even in the Mediterranean area, which is the most active now, it is mostly large trading companies that are buying billet, in long position. Regional re-rollers show only sporadic upturns of demand, as most of them are unable purchase the material regularly due to slow sales in longs segment.
In particular, prices for CIS square billet from Azov-Black Sea ports are currently at $575-585/t FOB. Moreover, there have reportedly been some bookings of the material at these levels. In particular, square billet from ArcelorMittal Kryvyi Rih and Metinvest International S.A. has been changing hands at $575-580/t FOB. Besides, the latter will start trading its January production next week. However, export offers of these suppliers remain limited, up to 50,000 tonnes.
Most of IUD's January production of billet has been reportedly sold to Lebanon’s LITAT Group at $580/t FOB. Metal Expert estimates, the remainder of January production will be offered at about $600/t FOB in view of the fact, that the producer's random length billet is now available at $575/t FOB. Nevertheless, considering that other CIS manufacturers as well as their Turkish counterparts are pricing their square billet at $580/t FOB, such price level is unreachable yet. Thus, the supplier is probably preparing another lift of billet prices beforehand in such a way. At the same time, traders say, LITAT Group is offering IUD's December production of square billet to Levant countries at $605-610/t C&F (about $580-585/t FOB) against $580/t C&F ($555/t FOB) two weeks ago.
As for December production of 150 mm square billet from OEMK (Metalloinvest), it is mainly sold to Turkey. For example, while last week the producer's material was changing hands at $570/t FOB, currently it insists on raising prices by $10/t. However, Turkish consumers are not ready to accept the rise yet.
Belarus SW have not yet started offering its January production, but traders believe the initial price will be $585-590/t FOB and the supplier will offer discounts of about $10/t, considering that it always offers the material on pre-payment terms.
Prices for Russian semis at Far Eastern ports, despite producers' desire to raise them again, have stopped at $560-570/t FOB in line with last week, and the deals are still being made at $560/t FOB ($585/t C&F). Alternative square billet from South Korea, which is being offered to Vietnamese customers and those from the Philippines by $10/t lower amid less strict custom regulations, also restrains the upward trend. Unfortunately, it is rather complicated to solve the problem by shipping the material to other Asian re-rollers because demand in the above countries is the most stable now.
The situation at Caspian ports is still unfavourable for exporters. Iranian customers have been inactive for three weeks, as they have purchased sufficient volumes of semis in September-October at the lowest prices. Besides, buying activity at Northern ports of Iran is also affected by additional days off, announced in the country for the second consecutive week in view of bad weather conditions in Tehran.
Nevertheless Metalloinvest, having sold most of December square billet output from Ural Steel at $585/t FOB, have offered the rest at $580/t FOB. The supplier has shipped to Iran about 10,000 of 150 mm billet from OEMK at the same prices – $580/t FOB.
At the same time, some sellers do not give up and insist on higher quotations of square billet at $590-600/t FOB. In particular, Mechel’s products are available in the above price range. In this situation, Iranian customers are firm and they are still bidding at $575-585/t FOB. However, suppliers are unlikely to cut prices amid existing upward trend at the Black Sea ports as well as limited export of semis.
(Source: www.metalexpert-group.com )