Black Sea billet export prices fell as a gloomier macro
economic outlook weighed on sentiment and many buyers decided to delay
purchases or buy just what was strictly necessary as they forecast further
price drops.
Traders quote Black Sea billet at $650-660/MT free-on-board
(fob)Russia and Ukraine, compared with $670-680 last week.
September generally sees a pickup in buying and prices as
buyers need to restock steel long products such as billet, used for
construction, after the long northern hemisphere summer break. Most of the key-importing markets in
the Arab world were also expected to resume purchases this month, after the end
of Ramadan.
But the news pointing to slower than expected economic
growth has depressed most financial markets and made steel buyers cautious.
Tighter credit also hit purchases.
“I don't think there is much demand as a result of
tighter credit and fear,” said a London-based billet trader.
A weaker Euro, Russian rouble and Turkish lira against the
U.S. dollar, meant producers in Europe, Russia and Turkey could lower their
prices in dollar terms.
European producers are selling billet at 475 euros
($650.320) per tonne fob Southern Europe, down from 495 euros per tonne last
week, traders said.
Traders expected demand to fall further also due to the high
margins between scrap prices and billet prices, which give producers the possibility
to drop their prices in response to weaker demand.
Prices for steel scrap, a key steelmaking raw material to
produce steel long product such as billet, were little changed from last week,
with US cargoes of HMS 1/2 sold at $470-475 /MT CFR Turkey.
On the London Metal Exchange, the benchmark billet contract
was bid at $560/MT, from a close at $580/MT last Friday.
Leave a Reply