Black Sea billet export market is
stuck in limbo, with producers and buyers digging in heels and refusing to
move. Producers' offers remain at $680-685/tonne fob Black Sea, whilst bids
don't seem to top $660-665/t fob Black Sea, market sources
“It is a bit messy,” a major trader says. “There are
anticipations of the euro collapsing which is bringing European exports to a
whole new level, and if European producers will get desperate and lower their
current offer prices of €490/t ($675/t) fob by €20/t, as their costs haven't
actually risen, they will compete with the CIS exporters and they will
win,” he says.
At the same time, Iran continues to experience financing difficulties, and now,
with October just around the corner, is too late to buy large tonnages from the
north, even if such tonnages were available. “Iran's southern trade is
already picking up, and is supplied by Turkish mills,” the trader adds.
Overall, demand in traditional CIS buying regions remains stable to slightly
down, traders say. Egypt needs to buy, but political unease remains an obstacle
to committing to buying. Syria exhausted its buying whilst Italy is described
as being “crucified”, and to import from the CIS would cost it €25/t
more than to buy domestically. The only market that is coming alive is Tunisia,
which could be capable of absorbing around 100,000t, but “not at $680/t
fob Black Sea”, sources point out
Whilst mills are willing to offer, no one is going below $680/t fob Black Sea
so far, but “they will come under pressure soon”, traders say.
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