CIS export market for square billet is still weak. Most buyers are still bearish, while the producers are making desperate attempts to prevent further development of the trend. As yet, Far Eastern market is still calm, while the standoff between sellers and buyers in the Middle East has not resulted in substantial reductions yet.
At the same time, Turkish suppliers, who are still reducing their prices to foreign markets, and their CIS counterparts are pursuing different pricing policies. For example, this week quotations of Turkish semis have rolled back to $625-630/t FOB from $640-645/t FOB in early February. However, it has been reported this week that exporters are going to raise their offers to $650/t FOB. Moreover, some Turkish mills have already started offering their material at this level. Traders have been sceptical about Turkish mills' efforts to increase prices, as they are sure that the trend is no longer relevant.
At the same time, suppliers of CIS material in Azov-Black Sea ports have started offering March production of semis only this week. As expected, the mills have attempted to avoid a substantial decrease by making a slight downward adjustment. For example, while February production of semis was booked at $630-655/t FOB, initial prices for March output of billet are at $615-640/t FOB. But buyers are reluctant to support this level with deals, bidding at $590-605/t FOB.
Belarus SW has allocated only 5,000 tonnes of billet to be produced in March for the free market and opened its sales at $640/t FOB Odessa on February 7. However, in view of current quotations of Turkish material and extremely slack buying activity in the region, the producer will have to reduce its offers by about $30/t, if it wants to sell any semis.
Offers of March material from Metinvest International S.A. and ArcelorMittal Kryvyi Rih are expected to appear in the market in mid-February. Elektrostal (Kurakhovo) has suspended production of billet and will not offer any March production of it, as it has problems buying scrap due to its high prices in the domestic market.
Meanwhile, demand for semis starts to rally in Iran amid declining prices for CIS material in the ports of Caspian Sea. While last week the material was offered at $640-650/t FOB, now its price has dropped to $625-635/t FOB. However, most of February production has been sold already, while prices of March output are just nominal.
In particular, about 40,000 tonnes Ural Steel's square billet produced in February have been sold at $630-635/t FOB ($15-20/t down w-o-w). Quotations of producer's March output of semis are expected to drop by some $5-10/t.
Distributor of REMZ's February material is still keeping its offers at $635-640/t, providing a discount of $5/t in case the buyer is interested. Nevertheless, customers are insisting on lower levels – $605-610/t FOB, and so no deals have been reported yet.
Besides, market participants inform that KazFerroStal's billet is available at $625/t FOB ($615/t CPT) Aktau, however its supply is limited.
Far Eastern market is still silent. Asian buyers have adopted wait-and-see attitude after holidays, watching the Mediterranean market for semis and the segment for scrap. They are evidently in the bearish mood and intend to drive billet quotations down to around $630/t FOB. However, the suppliers believe deferred demand may support their efforts to save their prices from significant reductions.
Considering that there are no actual offers of the material from CIS mills in the Far Eastern ports, current prices for Russian square billet are just nominal ($645-660/t FOB). ( Source: www.metalexpert-group.com )