Prices for billets in the CIS are above $ 400 per ton

CIS billet prices rose again last week as several traders and reportedly end users ordered various batches of Russian and Ukrainian billets, virtually closing the January supplier distributions.

Recent procurement deals ranged from US $ 405 /t FOB for Ukrainian metal to US $ 420 /t for a small batch of Russian scrap-based raw materials. According to traders, the latest data on bids for delivery across the Black Sea rose to $ 430 /tonne. This supplier has also sold several small batches over the past ten days at a price of $ 405-410 /ton. A Russian vertically integrated supplier sold to a trader at $ 407 /ton FOB.

The prices for billets in the CIS are with the prices for scrap in Turkey HMS 1 & 2 80:20. But they are too high compared to rebar prices at USD 430-440 per tonne in Turkey and USD 415-420 per tonne for CIS countries. This means that the market is not balanced and is driven by scrap prices and traders' transactions.

Billet prices - apparently due to higher prices - have not affected some key destinations in North Africa. In addition, there are many alternative blanks available. However, demand for scrap metal in North Africa is high due to local needs for billet /rebar production, however regional rebar demand is weak.

Demand for scrap from new rebar plants exceeds their availability and raises scrap prices, while preventing rebar prices from rising due to abundant rebar supply and a poor economic climate. This creates volatility in billet prices, traders say.

Meanwhile, ongoing trade wars and lengthy negotiations between the US and China are delaying recovery in end-use sectors that have the potential to sustain and drive rebar prices. The near zero difference between the price of billet and rebar in Turkey is just one example of unbalanced dynamics. There are others, such as factories in North Africa, offering their obsolete scrap metal to traders for export, as they do when they sense the price is about to peak and begin to decline, they add.

Admittedly, if China and the US finally agree to a trade deal, growth will be robust as prices for finished long products begin to skyrocket and a host of frozen construction projects return to service.