The future development of the CIS export billet market is still unclear amid unstable political situation in the Far East. Nevertheless, despite all the troubles, suppliers have managed to sell the most of March production due to tight supply (billet availability was limited because of reduced output and force majeure). Producers are in no hurry to start offering April production, hoping the situation in the segment will improve. In the last week, quotations in the Azov-Black Sea region have stabilized, while at the Caspian and Far Eastern ports suppliers have even managed to increase transaction prices by $10/t.
However, market participants still cannot agree on further changes in the segment. On one hand, there is opinion that after a long pause in purchases buyers from the Middle East and North Africa will be active in buying soon on depleted stocks. Thus, there may be no further decrease in prices for the material. Traders report some purchases by consumers from Iran, Saudi Arabia, Jordan, the UAE, Morocco and the EU. Buyers from the Philippines and Vietnam are expected to resume activity in the short term. On the other hand, demand for longs (rebar in particular) is still sluggish, while there is plenty of the material in domestic stocks. Besides, Turkish exporters have not yet succeeded in fixing prices for billet. Since they have been forced to cut $5/t this week, their current offers are $625-635/t FOB.
Offers of March production of CIS billet are still $620-630/t FOB at the Azov-Black Sea ports. Most deals were made in late February at $605-625/t FOB depending on supplier; now sales are decreasing. Bids are coming at $590-600/t FOB, which is unacceptable for sellers.
ArcelorMittal Kriviy Rih did not plan to export March production of billet, but entered the market offering a small lot (about 15,000 t) and sold it at $610/t FOB.
Ukraine’s Elektrostal will reportedly be collecting orders for this month’s production at $630/t FOB Mariupol until March 10. Taking into account prices under the recent contracts, the seller''s offer looks unrealistic. The steelmaker is firm: it is unreasonable to set lower quotations amid current domestic prices for scrap (on average $410/t ex-warehouse). So, market participants doubt that Electrostal will resume production this month.
Traders say Russia’s Metalloinvest has sold 15,000-20,000 t of March semis from OEMK to Turkish re-rollers. However, the contract prices have not been disclosed. The company has reportedly managed to sell some of the material to Indonesia at $605/t FOB.
Russia’s Novorosmetall is currently doing no business, presumably having redirected 10,000 t of March production of billet from the export market to Abinsk SW for rebar production. No offers of square billet from IUD have been reported.
BMZ has not started selling April output; however, it is expected to set initial prices at $630/t FOB.
Metinvest International S.A., having closed a number of deals for March production with Middle Eastern consumers at $610/t FOB in the second half of February, has made no shipments to this destination afterwards. The latest contracts have reportedly been signed with EU buyers at $620-625/t DAP. According to Metal Expert’s estimates, Metinvest International S.A. still has 20,000 t of unsold March production, which will be either shipped to the company’s plant Promet in Bulgaria or exported.
(Source: www.metalexpert-group.com )