Prices of billet from CIS exporters slipped last week as buying momentum slowed after a number of sales were made in the previous week, market sources tell Kallanish.
Large suppliers sold some October-casting allocation to Southeast Asia and smaller tonnages to North Africa. With Turkey out of the import market and Egypt still reluctant to book at above $500/t cfr however, CIS sales have paused. All major market participants are flocking to a bi-annual industry event in Istanbul this week where more sales are possible. Sentiment has weakened nevertheless, so these sales are unlikely to be made at higher prices, traders say.
CIS and Turkish billet are now each offered at approximately $490/t fob, but a workable level is considered at $475-485/t fob, depending on the supplier and tonnage. Turkish mills, in the absence of major rebar orders, are likely to be flexible in their pricing approach, too. Some traders cite $480-475/t fob Turkey as an absolute minimum that Turkish sellers will accept.
In addition, there are offers of billet from untraditional suppliers, at even lower prices, one trader says, and Brazilian billet is offered in Southeast Asia at around $480/t fob. There are expectations of more Brazilian material appearing in the market, as its US export quota has been used up.
Traders claim the current spread between offers and buyers' expectations makes them obsolete, thus slowing the market further. Attributing the recent attempts to lift quotes to scrap prices increases, they describe current demand as occasional, with some envisaging a difficult end to 2018 and possibly entire 2019, with prices continuing to slide.
With Asian buyers fully aware of the situation, they are unlikely to accept current offers, as dried up supply from Iran has been fully replaced and demand remains the same.