Posted on 25 Mar 2021
The CIS billet export market remains idle, having softened on the back of the ongoing Turkish scrap import price correction, further exacerbated by the Turkish financial sector turbulence of recent days, Kallanish notes.
Demand in traditional markets is described as lacklustre, and suppliers are not rushing to lower prices to secure sales. Considerable volumes of enquiries are coming from Central America, but buyers are not responding to offers with bids, traders say.
Activity is not expected to resume until the Turkish turbulence has passed, and some participants expect scrap prices to not fall below $400/tonne cfr Turkey for premium HMS 1&2 80:20. The current calm in the market is seen being replaced with activity in early April. Turkish mills are bidding for scrap at $410/t cfr, with offers at $420/t cfr.
The notion of the possible rebound is confirmed by China's domestic billet prices rising enough to lift import values in the region. A Russian mill sold several May-loading lots to various Southeast Asian destinations at $600-610/t cfr. It can sell to China at $605/t cfr already, with regional suppliers’ billet bought in China at $610-615/t cfr, and offers raised on Wednesday to $620-625/t cfr.
Black Sea offers remain at $570-575/t fob, for May-loading availability, and theoretically are likely to be workable in Asia within a couple of weeks, traders say. This takes the pressure off CIS mills to reduce prices, despite much hearsay in the market about a large, 50,000-tonne lot sale to Saudi Arabia, which regular Saudi buyers have denied.
Russian domestic scrap prices and logistics, depending on the mill, would make $530-540/t fob – the price the rumoured volume would have fetched, accounting for logistics, grade premiums and financing – unworkable for CIS scrap-based mills, a major trader says. But for blast furnace-based producers this price would enable considerable profit margin, and "it is possible one of the suppliers opted to sell ahead and secure May-casting books with a large volume," another trader says.
Source:Kallanish
