Russian billet prices face downside pressure

Russian billet offers remain largely stable but face mounting downward pressure as demand is weak amid the prospect of easing scrap prices, market participants tell Kallanish.

With rebar demand extremely weak, Turkish mills remain highly cautious on raw material procurement, intensifying downside pressure in the billet market despite billet’s relative cost advantage over scrap.

Several Russian mills are currently holding billet offers at $440-445/tonne fob Novorossiysk for early February loading, while some are targeting higher levels at above $445/t fob, despite acknowledging demand remains weak, according to a trading source.

In Türkiye, Russian billet offers were heard at around $465-470/t cfr Turkish Black Sea/Marmara ports. Turkish re-rollers were heard indicating their maximum workable level is $460/t cfr for Russian material, and with payment only after vessel arrival, according to a trading source. Another trader notes that Russian billet prices in Türkiye are currently assessed at around $460-465/t cfr, with Turkish buyers seeking January delivery, whose availability is very limited.

For Egypt, Russian billet offers were reported at approximately $485-490/t cfr, with all temporary duties and additional charges borne by buyers. Another source says market participants are awaiting further clarification on the application of temporary duties, which has left purchasing activity there subdued.

Meanwhile, Chinese billet offers were heard at around $475/t cfr Türkiye.

Market sources note that such levels imply an equivalent scrap cost in the low-$330s, leading participants to view imported billet as cheaper than scrap-based domestic billet production.

Source:Kallanish