Russian billet suppliers remain out of export

Russian suppliers of steel billets remain largely outside the export market, reports Kallanish
Two Russian plants reported receiving offers at $480 per tonne FOB Black Sea, but were hesitant to sell. This was compared to the desired level of $500-510/t FOB when Russia announced an exchange rate-linked export duty.

The temporary export duty applies from October 1, 2023 to December 31, 2024.

A temporary export duty based on the ruble exchange rate is in effect for exports outside the Eurasian Economic Union. The export duty applies to most exports, with the exception of oil, gas, grain and shipbuilding exports. The export duty rates depending on the ruble/US dollar exchange rate are as follows:

less than 80 rub. for 1 US dollar - 0%
80-85 rub. for 1 US dollar - 4%
85-90 rub. for 1 US dollar - 4.5%
90-95 rubles per 1 US dollar - 5.5%
over 95 rub. for 1 US dollar - 7%

On Tuesday, the rate briefly exceeded 100 rubles per dollar, indicating a duty rate of 7%. .

The main reason for the depreciation of the ruble is the trade imbalance: imports exceed exports due to Western sanctions.

In Turkey, steel producers have been hit by higher electricity prices since October as capacity to pass on finished steel to buyers was limited amid weak demand.

Some market participants expect that prices for imported scrap will be additional, which will increase downward pressure on prices for imported billets.

“It is now a buyer's market and in the absence of demand for finished steel, it is very unlikely that higher billet prices will be accepted in Turkey,” says the supplier. In addition, there is procurement of other origins, including Ukrainian origin, which is supplied from the ports of Romania.

About 100,000 tonnes of the billet were reportedly booked from Algeria over the past two weeks, with the most recent purchases reported at around US$525 per tonne CFR from Turkey. The buyer's source reports that Russian billet is available at a price of $505/t CFR in the Turkish ports of the Black Sea.