The Egyptian authorities' decision to suspend the provisional billet safeguard duty during further investigation has produced a mixture of reactions, with one thing being made clear. The market has turned even more unpredictable, with one trader describing it as "... gambling time for buyers.”
CIS mills have already indicated price increases. One scrap-based coastal mill, whose availability is extending to August shipping, is indicating $450/tonne fob Novorossiysk, with others at $430-440/t fob levels, also with August availability. Those traders taking a risk to buy these tonnages for Egypt would be taking a chance on delivering billet in time for a successful appeal by Egyptian steelmakers.
Some producers have already confirmed to Kallanish that they have launched or are about to launch an appeal, which, if successful, would reinstate the country's billet import duty. This could possibly leave any risk-taking traders massively out of pocket, sources say. Besides, the situation is being further complicated by another, almost unacknowledged, factor. "Iranian billet being shipped to southern Turkey, bundled in with Turkish billet on top, and sent to Egypt, is potentially complicating not only the investigation itself and the tonnages involved, but the market dynamic as a whole,” one trader say.
However, price increases seem to be on the cards regardless of the Egyptian duty, with CIS mills having sold to Turkey at round $438-440/t cfr. This indicates that rising scrap is already providing a market for CIS billet and pushing up rebar prices. Traders are counting on rising prices pegged by scrap, and restocking, they say.
A Russian coastal mill has booked around 10,000 tonnes of billet headed for North Africa at an equivalent of $446/t cfr or $426/t fob Black Sea, sources confirm.