Offers from billet producers in the Commonwealth of Independent States were stable in the second half of the week despite reports of limited demand.
Customers in Asia, particularly China, were not willing to pay above $700 per tonne cfr early in the week, which would be equivalent to $640 per tonne fob Black Sea. No deal were concluded at this price because it was considered too low by mills selling from Black Sea basin.
By the end of the week, Chinese billet buyers went silent following a sharp price drop in the domestic market.
Fastmarkets’ daily assessment for steel billet domestic, exw Tangshan, Northern China was 4,940 yuan ($771.74) per tonne, down by 80 yuan per tonne day on day.
Demand for import billet was limited in Europe as well.
Market Chatter ***
“Last week Italy paid $678 per tonne cfr ($645 per tonne fob Black Sea) for CIS billet and this week zero sales heard,” one trader said.
“And now freight is very high,” the trader said, adding that last week, the cost of freight to Italy from the Black Sea basin was $32-34 per tonne “and now it should be definitely higher due to limited number of ships.”
A second trading source, however, said that there was a limited availability of scrap in Northern Europe, which made customers interested in imported billet, especially wire rod grade.
Turkish customers, meanwhile, were wary to import billet due to the falling cost of imported scrap.
Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was calculated at $500.26 per tonne on June 17, unchanged day on day, but down by $10.29 per tonne week on week.
According to one source, a cargo of Russia-origin billet was sold to Turkey above $680 per tonne cfr, but the cost of freight to the Izmir region was about $38 per tonne.
Although no other sources could confirm the deal, market participants agreed that the cost of freight could be that high compared to the traditional $20-25 per tonne due to the limited number of vessels because of grain season. The cost of freight to the north of Turkey was estimated at $25 per tonne instead of traditional $15 per tonne.
Fastmarkets daily steel billet index, export, fob Black Sea, CIS was calculated at $650 per tonne on Thursday June 17, down by only $1 per tonne from $651 per tonne the day before.
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