Russian billet sellers have become bullish lately and have hiked offers significantly after successful sales for Egypt at higher levels, even though bids from Turkey are still lagging behind.
According to a few sources, from 30,000 mt to 50,000 mt of Russian billet have lately been traded to Egypt at $525-535/mt FOB depending on the grade and shipment. “Sales were mostly at $525-530/mt FOB, but one 10,000 mt trade was at $535/mt FOB [to a trader for the Egyptian market]. Egypt is accepting higher levels than Turkey,” a source said. One of the major reasons for the hike in sales and prices to Egypt has been the recent sharp hike in the local finished steel market in the country. Ezz Steel has hiked rebar prices by $23/mt (EGP 6,980/mt) compared to the latest announcement last week, as SteelOrbis reported yesterday, January 29.
The latest sale of ex-Russia billet from a trader to an end-user in Egypt was at $555/mt CFR, according to local sources, while this week the prices should go to $560-565/mt CFR for 3SP and $570/mt CFR at the lowest for DWR grade.
At the same time, some deals for 20,000-30,000 mt of Russian billets have also been rumoured, at $535/mt CFR to Turkey, which, however, has remained unconfirmed by the time of publication and a number of sources said that the price is too low and may reflect only the desperate need of some mills to push volumes. “Some offers were around $540-545/mt CFR last week, so I am not surprised that it finished at $535/mt CFR,” the representative of a Turkish mill said. Another trading source also confirmed that $540/mt CFR was available in the market last week from one of the Russian producers.
However, early this week all official offers have surged. For instance, the asking price from the Donbass-based mill is $535/mt FOB, while a few offers from Russian sellers are at $540-550/mt FOB for March shipment.
The SteelOrbis ex-Black Sea billet reference price has settled at $515-535/mt FOB, with the midpoint at $525/mt FOB, up by $12.5/mt since late last week.
Aside from Russia, Turkish market players have also been reporting several billet offers from Asia. Particularly, an ex-Indonesia 50,000 mt lot is available at $565/mt CFR for March shipment, more or less in line with last week’s levels. In addition, there is an ex-Malaysia position cargo of 30,000 mt for February shipment on offer at $575/mt CFR. In fact, the latter offer may be considered by the buyers who do not have an export license, while the lead time is also acceptable. “For that to be workable, scrap prices also need to be hovering at around $420-425/mt CFR at least,” a trader told SteelOrbis. Some market players report traders have from 20,000 mt to 30,000 mt of Algerian billet in hand from previous positions. However, they seem to be holding back sales, realizing that the market is relatively firm, that billet availability is not so plentiful and that lead times for these cargoes is quite advantageous for buyers.
In the domestic billet market, there is not much movement seen as only a few mills are offering actively. The price idea is within the range of $590-600/mt ex-works, versus $585-595/mt ex-works evaluations last week. “The captive billet production cost is not lower than $570-575/mt and in this market many choose not to produce excess quantities. So, billet will not be cheap for now,” a trader told SteelOrbis. As regards exports, some inquiries are coming from Europe and North Africa, but Turkish offers for overseas buyers are in line with domestic indications and so will hardly be workable, at least for now.