Square billet remains in short supply in the CIS export market. Billet volumes at the Azov-Black Sea and Caspian Sea ports are still limited, while mills have made no offers at all to the Far East this week.
Meanwhile, exporters from the Azov-Black Sea ports look forward to sales resumption after the religious holidays in the Muslim countries and summer holidays in Europe. As the construction season is coming, semis suppliers start to more actively discuss the forthcoming recovery of the segment willing to dispose buyers to a price growth. However, the latter are in a less optimistic mood and sceptical about the announced lift. Although customers realize that prices will go up anyway in September, they believe it will happen by the middle of the month. Till that time, quotations of billet will be at the summer peak levels of $680-690/t FOB. Nevertheless, the scenario may change if exporters manage to maintain the acute shortage in the market.
Most re-rollers stay on holidays so far, and only trading companies are booking semis now for future sales. Although September order book is still opened, steelmakers refrain from setting prices below the mark of $680/t FOB. At the same time, some of them have already started selling October output. However, not all traders are ready to buy square billet at the current quotations, and most are bidding by at least $15/t lower. Only Litat Group has bought about 40,000 t of September billet from IUD at $680/t FOB Black Sea this week. The company, which is one of the exclusive distributors of IUD members’ material, has probably made the purchase for long-term perspective and intends to sell it at higher prices next month. Turkish buyers have started booking import square billet this week despite the holidays. Better demand for longs in Turkey on the back of low stocks has stirred local re-rollers and traders up. For example, Metalloinvest has succeeded in selling most of September rolling from OEMK (about 60,000 t exported every month) to Turkey over the week. In particular, semis for production of SAE1008 wire rod were sold at about $680-685/t FOB. A contract for the similar material to be made in October by ArcelorMittal Kryvyi Rih was reported at $680/t FOB. Market players report quotations of commercial steel grades (3 sp/ps and 5 sp/ps) are by $10-15/t lower.
Meanwhile, the shortage of CIS semis has become even worse in the Caspian Sea region this week. Like last month, the entire September output of billet from Ural Steel has been sold domestically, just as market players feared. REMZ and Volga-FEST keep making no offers so far. Moreover, Casting (Kazakhstan) has cut export billet volumes for September: it will offer about 40,000-50,000 t instead of 80,000 t planned earlier. The company started offering 150 mm semis at $680/t CPT (about $690/t FOB) Aktau, September production, and 125 mm material – at $687/t CPT ($697/t FOB) Aktau.
It is obvious that traders are highly interested in purchases of these products since they expect an upturn in demand for billet in Iran soon. However, amid limited supply the Kazakh supplier is in no hurry to close sales and believes quotations will reach a new level in September.
No offers for Russian semis have been seen in the Far Eastern market this week. Having filled October order book, Evraz Holding has been out of the market for the second week in a row. Noteworthy, ZapSib plans to start repair its steelmaking facilities during a month starting from mid-September, so some of September orders have been postponed to October. As previously reported, sales of September square billet (about 80,000 t) were made at $675-685/t C&F in the first half of August, which means $650-660/t FOB.
( Source: www.metalexpert-group.com )