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CIS billet dips a little more, most mills are not offering - 2 November 2011

CIS billet export market
10 October - 7 November 2011
©SBB 2011
  10 Oct 11 17 Oct 11 24 Oct 11 31 Oct 11 7 Nov 11*
FOB $/t  590 - 610   590 - 600   580 - 600   580 - 600   580 - 590 

* SBB forecast, except announced surcharges

Ukrainian mills' export offers of billet currently stand at $580/tonne fob Black Sea, whilst Russian and Byelorussian steelworks are currently not in the market. The offers have generally slipped a little more this week, by about $5/t, with traders claiming sales have taken place at $570/t fob Black Sea.

Despite the slip, sentiment remains the same as last week, with pressure on mills from the traders who have gone short and who now appear to be talking the market down, a major trader tells Steel Business Briefing. "This is a dangerous game: some traders pre-sold low and struggle to buy at lower levels; if the market does not weaken more, there can be major losses for them," he says.

There appears to be much less expectation of a "crash", with more producer sources hinting they would rather reduce output and discuss each deal individually. Evraz is understood to have closed all of its December billet allocations, as it reduced the output of billet considerably. As Southeast Asian billet import market remains weak, sources close to the mill suggest the company could be flexible in fixing January tonnages, in expectation of an improving market from February.

Meanwhile, demand is said to be improving, at least in sentiment, as there is more interest from "just about everywhere," traders say. "Buyers are fishing; there are loads more enquiries," a major trader says. Persian Gulf, North Africa, Far East, Iran and "even Europe" are said to be showing interest.

"Big boys (mills) have made it clear they are not going down much more in prices, and the message seems to be seeping through... A lot of people think we have reached the bottom," a trader concludes.


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