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CIS billet exports liven up as traders get booking - 3 February 2012

CIS billet export prices
16 January - 13 February 2012

©SBB 2012

 

16 Jan 12

23 Jan 12

30 Jan 12

6 Feb 12*

13 Feb 12*

FOB $/t

 580 - 600 

 560 - 575 

 560 - 575 

 560 - 575 

 560 - 575 

* SBB forecast, except announced surcharges

After a week of very low activity in the CIS billet export market, deals are being concluded at prices in the lower range of recent offers - equivalent to $560-565/t fob Black Sea, Steel Business Briefing learns from the market sources. A 30,000t mixed Ukrainian and Russian origin consignment of March lad-readiness have changed hands at $585/t cfr Turkey, yesterday, sources say.

Another, Ukrainian consignment of 60,000t, was sold to Egypt at a currently "unworkable" level of $610/t cfr and to Saudi Arabia at $620/t cfr, by the trader with "considerable freight advantages," SBB is told.

With major fundamentals, such as the potential increase of availability of USA scrap, low consumption of finished long products in Europe and Turkey and the strengthening Euro - pointing towards a further weakening of scrap prices, some are questioning how long the current buying activity will continue. However, with Saudi Arabian mills back in the market whilst the Caspian Sea billet trade is frozen due to tightened sanctions, producers must have wanted to cut risks and sell whilst traders were willing to buy, perceiving the current levels “as a bottom”, one trader says.

Last week's prepayment-based deals at $560-565/t fob Black Sea level have become the level for producers selling on regular terms this week, indicating the market might have bottomed. "There was potentially at least 100,000t of billet in the market, which producers knew they could not sell to Iran, and had to let go of," another trader says.

Russian and Ukrainian producers, meanwhile, have always maintained that considerable volumes of delayed demand in their traditional export markets and subsequent restocking, will produce a bullish market, even if only for a short while.

 

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