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CIS billet export prices slide as demand cools off - 20 March 2012

Prices of billet offered for export by CIS producers have declined; one trader has booked 5,000 tonnes of Russian April load readiness commercial billet at $595/tonne fob Black Sea, the trader tells Platts Steel Business Briefing. "There is plenty of billet available at the moment for April load readiness; we booked the mill that was first to accept the bid," he said.

Whilst there are still offers in the market at above $600/t fob Black Sea, demand for these is waning fast, according to sources. A Southeast Asian trader says he was offered April casting billet from Ukraine’s Kryviy Ryh at $605-610/t and March shipment Electrostal at $605/t (with prepayment), both on fob Black Sea basis, and Volga-FEST March load readiness billet at $610/t fob Sea of Azov.

With Russia's only captive DRI-based producer OEMK now in the market offering April casting, prices could decrease even more, as the mill, which traditionally sells to its rebar producer Hamryiah Steel in Dubai, the Middle East and Iran, has got fewer outlets for its billet.

With Hamriyah Steel not producing rebar at the moment, trade with Iran disrupted severely, and Southeast Asia unable to absorb all the available tonnages, OEMK is likely to test lower levels, trader say. "There is demand for specific grades/sizes in the Persian Gulf and Indonesia," according to one trader, "at $600/t fob Black Sea, but to sell 125x125mm regular length commercial grades at these prices would be next to impossible," he says.

Traders say OEMK does have a capacity to lower prices considerably since it is producing from a captive lower cost source. It may be more likely to switch to selling metallics in the open market instead, but demand for primary iron is far from good, they add.

CIS billet export prices
March 2012

©SBB 2012

 

27 Feb 12

5 Mar 12

12 Mar 12

19 Mar 12

26 Mar 12*

FOB $/t

 600 - 610 

 600 - 620 

 600 - 620 

 595 - 610 

 595 - 610 

* SBB forecast, except announced surcharges

 

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