Posted on 19 Aug 2021
The Black Sea billet export market nosedived on Wednesday, largely on the back of the Turkish integrated producer reducing its rebar prices sharply, Kallanish notes.
The producer sold at just over $660/tonne ex-works (see separate article). This sent Turkish billet bids down over $30/t to around $610-620/t cfr Turkey maximum.
Some sources doubted Turkish re-rollers would pay even these levels, as pressure on scrap prices remains, with participants expecting further declines in Turkish scrap import prices. The Turkish nominal billet import price decline of an estimated $40/t on-week is pressuring other regions to review their bids, and the abundance of material on offer adds to the bearish sentiment, traders note.
The were no firm offers from any supplier, however, as the market was digesting the Turkish rebar price decline. Traders opined that selling at $620/t fob Black Sea would be a fantastic price, but doubted it would be possible considering available volumes of billet, scrap price dynamic and the deepening erosion of confidence in China's rebound this current quarter.
The Russian ferrous duty of 15% or $115/t is curbing Russian sellers' competitiveness, but Ukrainian sellers, unencumbered by duties, may reduce prices to secure sales, as September-cast material is still on offer, sources say.
With the European market still locked into holiday mode, and demand in Asia paralysed by current lockdowns, Black Sea billet prices need to adjust to fit existing interest to be sold. Although it is unclear what price Turkish domestic billet will fetch when sales open, it is unlikely to increase, considering the dynamic, a trader concludes.
Source:Kallanish
