Posted on 08 Feb 2022
The CIS billet export market remained tight over the past week, with trade still mainly focussed on Egypt, Kallanish notes. Prices continued to rise, with some participants saying they may be peaking, unless post-Lunar New Year demand in Asia gives a second wind to the Black Sea billet market's recovery.
Egypt continued to book CIS billet, but sales were relatively scarce, as sellers were offering at $660-670/tonne fob Black Sea, around $10/t higher on-week. Combined cost and freight of shipping to Egypt is estimated by traders at a minimum of $50/t. This is due to local logistical and financing specifics, and freight, which is estimated at around $35-40/t for a 15,000-20,000-tonne cargo. Offers at $710/t cfr Egypt produced at least one sale last week, but market sources are pondering whether the ascending trend has more longevity.
On one hand, rising prices of iron ore, scrap and energy are supporting cost-based increases, along with Asian markets' expected recovery later this month. On the other hand, CIS traditional buying markets in North Africa and the Middle East continue to lack the ability to book billet at offered prices, countering with much lower bids, in line with fob price levels.
Turkish bids continue to be at below sellers' current indications, but traders' earlier booked positions are soon expected to be released at $680-690/t cfr Turkey, as the country's scrap import prices and long products selling prices are rising. Some traders expect Turkey may book CIS billet at up to $700/t cfr, if new rebar and wire rod offers succeed, and scrap continues to rise. But thus far, no sales to Turkey were heard in the past week.
Turkish producers are also active in the billet export market, with one mill selling a 15,000t cargo to Central America at $750/t cfr last week. The price would net back to around $680-690/t fob, traders suggest, in line with Turkish domestic billet prices, although the exact cost of freight is not known.
In Russia's Far East, offers remain limited as the market is only just returning from the holidays, but low availability is being observed already, some traders say.
Source:Kallanish
