CIS billet: Price slips but sentiment strengthens

The CIS billet market today slipped slightly on a deal made at a lower level but rebar sales and a US-origin scrap seaborne deal gave a boost to market sentiment.

The Argus daily Black Sea steel billet assessment slid by $3/t to $367/t fob today.

A deal was heard from a Russian mill to southeast Asia at $365/t fob, but since the cargo was for 45,000t, a discount was likely made for the large tonnage.

Bid and offer indications remained stable, suggesting market participants are watching scrap prices before making any moves. Bids were in the range of $360-370/t fob while offers remained at around $370-375/t fob.

Sentiment was on the whole more positive as scrap prices seemingly gained some strength. One deal was concluded from the US to Saudi Arabia for premium HMS 1/2 80:20 material at the equivalent of $245/t cfr Turkey.

Iran is also sold out of billet until the end of October, meaning billet buyers that have not made a purchase in the last few weeks are facing a shortage of stock and therefore seeking more prompt delivery, one seller said.

Three Iranian sales were made into the GCC and southeast Asia within a range of $365-370/t fob — similar levels to CIS — indicating that levels for Iranian material have reached a floor. Sentiment in Iran was positive on sanctions talks with the US, one Iranian exporter said.

If these talks are successful, Iranian billet could once again be offered at a premium to CIS material, allowing CIS mills to take advantage of the southeast Asia and GCC markets.

Buyers of Iranian material are indicating that $350-355/t fob should be workable but sellers are now reluctant to bring prices down any lower, said the Iranian mill. The risk is that India could still step in to offer at lower levels. But the last offers from India to the GCC region were heard on Monday at $390/t fob, equating to $415/t cfr, meaning sellers will have to come down to compete with current CIS offers.