Firm demand supports Black Sea billet

Posted on 12 January 2021

Black Sea billet prices appear unchanged so far on December trading levels, reasonably supported by raw materials and finished product prices. But offers from mills, which have only just returned to the market, are yet to be tabled, Kallanish hears from market participants.

Traders anticipate CIS mills to keep offers at $610-620/tonne fob Black Sea and Turkish mills at $640-650/t fob Turkey, in case of availability, but demand is appraised at around $600/t fob maximum this week. This may rise eventually towards the end of the month, they say, depending on feedstock developments and demand.

It will also depend on how the lower-priced material booked by traders in October and arriving in the next few weeks will be priced, and whether it will be delivered to the original buyers, or renegotiated. The latter is not unknown in a rapidly ascending market, traders muse.

Taking into account sufficiently strong demand from Turkey and a number of new importers in the market, such as Latin America and North Africa, the volume of offers from mills only may not be sufficient. This would create another opportunity for traders. Latin American demand is estimated at around 100,000-120,000t this month alone, while North Africa, without European supply, which one buyer describes as "…zero", would be able to absorb equal volume, depending on price.

Importers in Morocco are expected to re-enter the market at $630-635/t cfr, with Algeria and Tunisia at $620-630/t cfr, but their return is not anticipated this week. "A number of buyers will be waiting for the January-arrivals saga to end before committing to buying, although by that time they will be looking at March-casting sales, considering volumes of demand," one trader notes. 

Turkey is at $610/t cfr, but ongoing flat products and scrap market strength may encourage higher-priced bids later in the month, sources say. They note healthy rebar and, especially, wire rod rolling margins at these billet prices.

Offers have risen in Asia too, despite Chinese billet price fluctuations on Monday. New offers are at $610-615/t cfr, depending on destination.

The majority of participants have been unable to assess the effect of the possible implementation of export duty on CIS billet, and do not appear concerned. But some mills tell Kallanish the implementation would be harmful for trade, citing the possible reduction in export volumes as detrimental to the companies' budget revenues.

Source : Kallanish