The situation in the Caspian region has become even more unfavourable to CIS billet suppliers. Iranian traders have stopped buying at the end of the fiscal year. Besides, domestic prices for long products keep sliding amid poor demand for construction steel. As a result, re-rollers mostly buy in the secondary market. Stocks are reportedly high at the northern ports of Iran, which makes traders sell at lower prices.
This week, Kazakhstan’s Casting came out offering March production of billet at $590/t FOB Aktau. However, seeing no response from buyers, the producer has cut the price by $5-10/t at once and then made a deal for small quantity (under 5,000 t). March production from Ural Steel was reportedly priced at $610-615/t FOB earlier this week; however, the level has not been accepted by Iranian consumers. Suppliers of billet from REMZ are currently out of the market, unwilling to sell at low prices.
With FOB-prices at the Far Eastern and Black Sea ports being by at least $25/t higher than at the Caspian ports, Russian square billet suppliers may decide to make no sales to Iran unless the situation improves. The Far Eastern region has seen no increase in business so far. However, exporters of Russian billet do not worry since there is not much material available for sale. At the same time, consumers from SE Asia are not very active in buying, as they prefer to wait until the situation becomes clear in billet market. Traders report the level of prices buyers are ready to accept is $650-670/t C&F (some $630-645/t FOB) at the moment. Market players say the latest Amurmetall''s tender has been reportedly closed at about $640/t FOB (10,000 t of March production of billet), down $13/t m-o-m. However, Evraz Holding, which is to export 15,000 t or less billet it will produce in March, is not willing to sell at below $660-665/t FOB ($680-685/t C&F).
Square billet demand from Vietnam and the Philippines is expected to grow by the middle of March, which may push prices for the material up. Besides, scrap prices will likely increase.
( Source: www.metalexpert-group.com )