Posted on 04 Oct 2023
Russian steel billet suppliers are predominantly staying out of the export market, market participants inform Kallanish.
Russian billet producers’ real prices will become evident around mid-month when mills need to finalise sales decisions. Until then, they will encourage bids.
Two Russian mills reported receiving bids of $480/tonne fob Black Sea but are hesitating to sell. This was compared to their desired level of $500-510/t fob, when the export duty linked to exchange rate was announced in Russia.
On Tuesday, the rate briefly exceeded RUB 100 per dollar, indicating a 7% duty rate. Predicting the rouble's trajectory until year-end remains uncertain.
The primary reason for the rouble's depreciation is the trade imbalance, with imports outweighing exports due to Western sanctions.
In Turkey, steel producers were hit by a power cost increase from October, with limited ability to pass it on to finished steel buyers amid weak demand.
Some market participants expect there will be additional pressure on imported scrap prices, adding downward pressure on imported billet prices.
“It is a buyers’ market now and in the absence of demand for finished steel, it is very unlikely that higher billet prices will be accepted in Turkey,” a supplier says. Moreover, there is availability of other-origin billet, including Ukraine origin which is supplied from Romanian ports.
Around 100,000 tonnes of billet are rumoured to have been booked over the last two weeks from Algeria with the most recent purchases reported at around $525/t cfr Turkey. A buyer source indicates that Russian billet is available at $505/t cfr in Turkish Black sea ports.
As a result, Russian billet was assessed at $475-480/t fob Black Sea, narrowing up from $470-480/t fob last Friday.
Source:Kallanish
