CIS billet market becalms, bids continue to dip

Posted on 22 August 2019

Source: Kallanish

The CIS billet export market remains in flux with no sales made in the last three weeks, as buyers' bids continue to lower, while mills remain firm with their offers, Kallanish learns from sources. 

Producers' offers have lowered to around $405-415/tonne fob Black Sea, but bids have now dipped below $400/t fob levels, sources say. They question the stance taken by suppliers, considering September casting volumes’ availability is still high, and market dynamics are indicating an ongoing softening.

Producers are resisting the pressure to lower prices based on current feedstock prices, which, despite some softening, are still strongly supporting billet prices within the current offer range. Having waited for renewed interest after Eid holidays last week, several sell-side participants confirm that expectations so far remain fruitless. But with the Russian domestic long products market also softening, and amid relentless competition, buyers are questioning CIS suppliers' stance, considering the low level of September casting books’ sales.

CIS producers can be competitive for large volume sales in Southeast Asia from the Black Sea, as billet can be sold at $435-440/t cfr, depending on the destination, one source notes. But strong regional competition is thwarting CIS mills' chances somewhat, as India and other regional suppliers have resumed their export push for every product, including billet.

Bids from North Africa are not higher than $400/t cfr, unworkable at the level of current CIS offers. These can be easily covered by European billet, at a staggeringly low €350/t ($388/t) fob with lower lead times, as most of European offers are for September load-readiness, European sources say. 

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