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CIS billet export prices 'yet to reach bottom' - 24 November 2011

CIS billet export prices
November 2011

©SBB 2011


31 Oct 11

7 Nov 11

14 Nov 11

21 Nov 11

28 Nov 11*

FOB $/t

 580 - 600 

 575 - 600 

 575 - 600 

 575 - 600 

 575 - 600 

* SBB forecast, except announced surcharges

Despite what mills are saying about sold out tonnages, few market sources look with any degree of optimism into the next quarter. "Germany's failure to sell their bonds – when they are usually flying off the shelves – has weakened the euro momentarily. We see little changing in the near future in terms of available liquidity," one major trader says.

According to mill and trading sources, billet prices might have gone down from the last few weeks' lowest levels of $570/t fob Black Sea. Several traders have heard of offers of $560-565/t fob Black Sea, noting that those might be either pre-payment, or distressed cargoes, of which there are few floating around.

Mills insist they would rather continue to trim their output, although recent calculations have shown that European output changed little last month. On the contrary, Ukraine's ISD cut its crude still production by a half at Alchevsk and by a quarter at DMKD, but said it has sold out of December and January billet, at prices of $575-580/t Black Sea. Metinvest sources say they are almost done with December, at $570-575/t fob Black Sea.

Iran continues to suffer from lack of funds and a huge gap of 20-23% between its official and black market currency exchange rates, sources say. There is talk of prices of $540-550/t fob Astrakhan, but even at these low levels, Iran looks unable to buy despite having low stocks.

The sentiment is very mixed, although it is clear that the optimists in the market are getting less and less. "Until there is free flow of money again, how can we possibly expect any buying?" one producer ponders. "There will be more production cuts when price of billet reaches the bottom, which it didn't yet," he concludes.


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