Situation in the CIS export market for square billet is still contradictory. Market participants have different opinions about the further trend: some of them fear that semis may fall in price amid a slump in scrap quotations, expected in April. Others believe that the quotations will not drop on the back of construction season and Iranian market revival after the holidays.
Square billet exporters in the Azov-Black Sea region have been the most active this week, as they have enough volumes of April casting. But they are still in a difficult situation as political unrest in the Middle East hampers sales. However, though buyers are insisting on reductions, suppliers are not going to back down. Moreover, in view of firmer demand some of them have attempted to strengthen their position in advance, paving the way for the further increase in quotations. Supply of semis is still insufficient in the Far East, while the Caspian Sea region is celebrating the Iranian New Year.
A pick-up in business activity of the Middle Eastern buyers, who have recently become much more interested in CIS material, has allowed some suppliers from Azov-Black Sea ports to increase quotations of April production of square billet by $5/t. At the same time, other producers, who are unable to sell the material at higher prices, keep their offers unchanged. Only Elektrostal (Kurakhovo) has reduced its quotations by $5/t, but buyers hesitate to purchase its material in view of constant problems with supply of raw materials the plant has.
Nevertheless, in spite of the fact that demand for billet remains scarce, some exporters have managed to sell their material at $620-625/t FOB. However, in general transaction prices for CIS square billet vary in the range of $615-625/t FOB, against $615-620/t FOB last week.
Noteworthy, Saudi, Syrian, Emirati, Egyptian and Turkish buyers are showing demand for CIS semis at the moment. However, few of them are ready to purchase the material at $615-625/t FOB, while others insist on lower levels – $605-610/t FOB. But exporters stand fast, so buyers will unlikely be able to purchase April casting at prices that low. There is no buying activity at the Caspian ports due to Iranian New Year holidays. Nevertheless, as Iranian construction segment is expected to revive in April, traders have managed to convince sellers to make reductions and purchased CIS square billet on long-term expectations before leaving the market.
So, Casting (Kazakhstan) reduced offers by another $10-15/t, to $595-600/t FOB Aktau last week and closed sales of April output. The supplier of semis from Ural Steel has reportedly sold about 70,000 t of billet to be produced in April at $610-615/t FOB, by $10/t down from three-week-ago levels. However, given a tough stance of the semis distributor from REMZ, who is not ready to ship the material lower than at $620/t FOB, no deals have been reported.
Far Eastern market is more stable: demand from Asia remains steady, while supply of Russian material is still limited, which allows to keep prices high. Currently, customers from Vietnam, Thailand, the Philippines, Indonesia, Myanmar show interest in semis imports, but only some of them are ready to pay $660/t FOB. At the same time, some customers are still bidding at $660-670/t C&F (about $640-645/t FOB), but these levels are totally unworkable.
Market players report, this week a lot of billet to be produced in April from Amurmetal has been sold at about $655/t FOB, by $10/t higher than a week ago. Evraz Holding managed to sell out April semis output (up to 40,000 t) at $600/t FOB ($680-685/t C&F, to Thailand particularly) in mid March, so now it stays away from the market. A deal for square billet of April production from Ural Steel (Metalloinvest) is reported at the same level.
(Source: www.metalexpert-group.com )