The rise in prices for the Black Sea billet continues

Export prices for Black Sea billets reached a new high last week, but they are unlikely to stop there. With CIS sellers enjoying their traditional breaks in early May and China's weekend ending on Wednesday, activity is expected to pick up, although now slightly lower, driven by the huge current and projected seasonal demand.

Currently, only Turkish billets are freely traded in the Black Sea after a series of domestic sales late last week and early this week at up to $ 650 per tonne from the plant. Turkish supply indicators at $ 645-650 per ton fob. Turkey may be short lived.

The resumption of growth in prices for imported scrap from Turkey, which rose by almost $ 30 per tonne last week, albeit largely at the expense of flat steel producers, is affecting the billet market. This week offers of domestic billets at a price of $ 670-680 per ton from the plant are already heard, which will probably be followed by exports.

Traders note that the import price of processed billets to Turkey is about $ 640-650 per ton, but currently there are no offers from the CIS, and long positions of traders are very limited. The latter is due to frozen and, in some cases, tightened banks' credit lines for traders, as contract prices are rising exponentially.

Some traders' credit lines allow them to trade only half of their traditional volumes, excluding small and medium-sized retailers in traditional African markets, traders acknowledge.

But it also affected larger traders: according to fellow traders, one of the largest trading firms in the world recently lost 3% of its credit lines. “While the market is evolving, there is less availability with fewer trader positions,” notes one trader, adding that more direct large sales are happening to Latin America, China and the Arabian Peninsula.

But some small sales to North Africa from the CIS countries did take place at USD 643–648 per tonne cfr, which brought back about USD 615–620 per tonne FOB in the Black Sea. There are currently no offers from CIS suppliers, but a minimum of $ 20 /t is expected to rise when sellers return from next week's weekend with June casting volumes. The prices they offer will largely depend on the demand in Turkey and China at the time.