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CIS billet prices slips $15/t down in less than a week - 19 January 2012

The CIS commercial grade billet bid prices have slipped to the levels of $580-585/tonne fob Black Sea with offers now ranging $595-615/t fob Black Sea, market sources tell Steel Business Briefing. "The market is drifting downwards: real demand is around $585/t fob Black Sea – there could be a lot of business at this level today," a major international trader says.

Only very few deals have been concluded at last week’s offers of $605-615/t fob Black Sea, sources say. This week, Byelorussian Steel Works is said to have sold March casting at $585/t fob on a pre-payment basis, whilst Ukrainian billet is said to be offered at $595/t fob Black Sea.

The range of offers is quite awkward at the moment, with higher quality billet from OEMK, for instance, having been concluded last week at $600/t fob Black Sea, whilst lower quality Electrostal's billet – also offered with partial prepayment – is still at last week's $615/t fob level, according to traders.

Producers are evidently resisting accepting lower bids, but pressure on Turkish scrap import prices is evident from very low level of sales in the last week, and from not-so-rosy outlook for Turkish domestic and export sales, especially for longs, sources say. But whilst these pressures will continue to affect CIS billet market sentiment, no-one is talking about a collapse.

"What we see is a correction, which was expected. Billet was stuck at an awkward level on a cusp and was expected to correct, especially considering what traditional markets are prepared to pay today," another trader says. According to him, Morocco, Tunisia and Egypt are out of the market, with the latter rejecting offers of $610-615/t cfr. And since Iran continues to have difficulties paying, there is not one single market that could elevate the billet price today, he adds.


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