Exports of CIS billet: prices at Azov-Black Sea ports keep growing - 14 Dec 10

Bullish sentiments still prevail in the CIS export billet segment, but they are realized only by suppliers from Azov-Black Sea ports. Their counterparts at Caspian ports rely rather on the volume of sales than on price raising, taking into account firm demand for semis and static prices. Producers in the Far East have not succeeded to lift their quotations either amid slow improvements in the finished product market and severe competition in semis segment. However, they try to be optimistic, believing this is only a matter of time.
As a result, only deals with Middle East and North Africa with shipments from Azov-Black Sea ports have been reported this week. Market observers say sellers have been taking advantage of limited supply (end-December sales will be limited and bookings of January shipments may be problematic) and soaring scrap offers. Having convinced buyers that semis prices would be rising soon, exporters have concluded a number of deals in Syria. Buyer interest is also coming from Egypt and Jordan, but it has not been confirmed with contracts so far. Current offers of billet at Azov-Black Sea ports are $590-600/t FOB (+$15/t in a week). The latest deals for end-December–early-January production have been made at $575-585/t FOB.
On December 7, Belarus SW reportedly opened sales of January production of billet (about 5,000 tonnes) at $595/t FOB. Market participants believe most of the material was purchased by Latvia''s Liepajas Metalurgs, same as last month.
Offers of semis from Novorossmetal are also limited (about 10,000 tonnes), since most of the output is shipped to Abinsk SW. That is why the supplier does not hurry to sell January output, quoting high prices. The latest contracts for billet of Novorossmetal December casting have been reportedly closed at $575-580/t FOB. Russian supplier Metalloinvest, after selling the rest of December billet output at $585/t FOB, plans to introduce a $15/t increase for January casting next week.
ArcelorMittal Kriviy Rih and Metinvest International S.A. have reportedly managed to increase transaction prices to $580-585/t FOB against $575-580/t FOB a week earlier. Market participants say ArcelorMittal Kriviy Rih is out of the market at the moment, having announced that its January order book was full. Some market sources believe the producer is delaying sales to gain higher profit later. This gives a reason to believe that Metinvest International S.A., in the absence of its main rival, will soon push its offers up, to $595/t FOB.
Traders also report Lebanese company LITAT Group is quoting $605-610/t C&F ($580-585/t FOB) for square billet from IUD to Levant countries, unchanged from a week-ago levels. Transaction prices are reported to be in the same range.
In the Caspian region, Iranian buyers have started buying CIS billet (with shipments from Russian and Kazakh ports) more actively in December. However, CIS sellers have managed to lift their offers only by $5/t in a week, to $585-600/t FOB, since steel product quotations are not set yet and suppliers from Brazil and South Korea are offering their products at the southern ports too, along with those from Turkey and CIS. However, the levels have been already confirmed with contracts. In particular, the latest deals for December production of Metalloinvest and Mechel have been closed at the above levels. Offer prices for January semis are expected at $600-605/t FOB.
Situation in the Far Eastern ports has been unchanged: quotations of billet have been varying in the range of $560-570/t FOB for two weeks, while transaction prices do not exceed $560/t FOB ($585/t C&F). Taking into account steadily growing prices at the Black Sea ports and high construction activity in Asian countries even in winter time, suppliers are sure they will be able to make an upturn.  
This week Amurmetal (Russia) has reportedly held a tender for the remaining 10,000 tonnes of December square billet. Market participants believe the material will be sold at no higher than $565/t FOB.
According to reports, Russia’s Evraz Holding has already filled its January order books and plans to start offering February casting after the New Year holidays.


Dec 14, 2010 14:00
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