The situation in the CIS export market for square billet is quite unfavourable: market operators mostly do not expect demand to strengthen in April as they did last week. Producers cannot resist the decrease buyers are calling for, because seasonal factors affect the export market for finished longs only slightly and scrap prices have dropped. Besides, more intense politic situation in some Middle Eastern countries prevents key customers from buying traditional volumes. Therefore, quotations of billet may slide to $600/t FOB in a few weeks.
However, some market operators hope demand in Iran will surge by mid-April. Suppliers in the Azov-Black Sea region may avoid a significant rollback in prices by redirecting part of their material to Iran via Volga-Don. However, exporters already have reduced their offers somewhat.
Prices in the Far Eastern market are going down as well, which may be attributed to the fact that Asian consumers are not ready to purchase at mid-March prices. Yet, due to short supply of Russian material (only Amurmetall has some volumes available for April) prices are more or less stable. Nevertheless, only major trading companies may participate in the supplier’s tender. The Caspian region is seeing a holiday lull.
Thus, quotations of April billet in the Azov-Black Sea region have rolled back by $5-25/t to $610-625/t FOB in a week. Whereas in the second half of March exporters managed to sell at $615-625/t FOB, at present buyers refuse to accept the above level. Sellers have managed to close deals at about $625/t FOB only with EU consumers (the Italians in particular) due to devaluation of the US dollar. Bids from Middle Eastern buyers are coming by at least $20/t lower; deals at $615/t are rare as well.
Thus, Elektrostal has had to cut another $5/t; however, this has spurred no buying either. Billet supplier IUD, who planned to sell April production at $640/t FOB, has been forced to cut $20-25/t.
ArcelorMittal Kryvyi Rih has already closed its order book for April, having concluded the latest contracts at $620/t FOB.
( Source: www.metalexperts-group.com )