Situation in the CIS export market for square billet has changed again by now. Suppliers in the Caspian and Far Eastern ports, who have been active in late February-early March, have temporarily withdrawn from the market waiting for better times. Sellers in the Black Sea ports, on the contrary, have started trading actively. With most mills’ March order books being already full, sales of April material have commenced.
As before, CIS square billet is mostly sold to Middle Eastern countries (in particular, Syria, which has been out of the market for over a month, Turkey and the GCC) and the EU.
However, although billet is still in poor demand, steelmakers have made some progress. In particular, sellers from the Azov-Black Sea ports have spurred buyers, who were inactive last week. Although bids are coming at $590-600/t FOB, transaction levels have not been lower than $610/t FOB. Moreover, this level was seen in early March only, whereas lately the product has changed hands at $615/t FOB. In this situation, some exporters have tried to put up offers by $5-10/t from last week. Turkish exporters have managed to raise their billet quotations as well, by $10/t to $635-645/t FOB over the same period.
As expected, Elektrostal (Kurakhovo) has not succeeded in selling March production of billet at $630/t FOB, since bids did not exceed $615-620/t FOB. Considering that production of semis was to be resumed on March 11, the seller probably has been forced to cut prices as demanded by buyers.
BMZ is still negotiating prices, having started selling April production of billet at $635/t FOB. Traders believe the supplier will have to cut at least $15/t, taking into account the latest transaction levels for CIS material and 100% prepayment terms.
Metinvest International S.A. is reportedly offering square billet to Poland at $625-635/t DAP, for late March-early April production.
Most CIS suppliers of square billet have been inactive in the Caspian region. Only Kazakhstan’s Casting has made another attempt to lift offers, but failed. So, the seller has started offering April output to Iran at prices increased by $25-30/t over the week, to $620/t FOB Aktau. However, traders believe the current levels are too high as Iranian buyers are bidding $590-600/t FOB. At the same time, suppliers of Russian material are staying away from the market: offers of square billet to be produced in April from Ural Steel are expected to come to the market only in mid March.
The situation in Far Eastern ports stays unchanged. Evraz Holding has not determined export volumes of April production, but they are likely to be limited – no more than 20,000 t. At the same time, the supplier will probably try to strengthen its position amid gradual recovery of semis market on seasonally stronger demand. The initial prices are forecast to be set at $660-670/t FOB against $655-660/t FOB for March output of billet. The latest tender of Amurmetal has been closed with a sale of 10,000 t of square billet at $645/t FOB, while the next one will be held only in mid March.
Currently, quotations of CIS material from Far Eastern ports are just nominal – $645-660/t FOB, unchanged since last week.
( Source: www.metalexper-group.com )