Steel billets prices rose amid restrictions on Russian exports

Prices for steel billets in ports of Black Sea in September 15-22, 2023, increased by $5/t or 1.1% compared to the previous week – up to $470-475/t FOB. Since the beginning of the month, product prices have risen by 2.1% compared to the price on August 31, 2023.

Collecting in the Black Sea ports during the past week remained mostly stable, as it has been since the beginning of the month. The increase in the price level was recorded on September 21. At the same time, only the lower limit of prices increased.

There is a lack of activity in the market as consumers choose to be cautious given the weak and uneven demand for steel products. The slight increase in price levels is supported by the increase in the cost of scrap, in particular in Turkiye, where the main consumers of Black Sea billets are concentrated, and by restrictions on exports from the Russian Federation.

Demand for Black Sea billet from Turkish buyers is rather weak due to low rebar sales volumes, although there is an improvement in domestic demand for long-rolled products. Export demand for Turkish products is still low.

In addition, Russian products are losing demand among Turkish steelmakers, as steel producers are afraid of falling under European sanctions due to the production of rolled steel from raw materials of Russian origin. Some batches of raw materials continue to be supplied to the Turkish market with more attractive prices.

Due to the lull in the Turkish market, Russian and Iranian suppliers have become interested in the alternative ACEAH market, where prices and demand are more attractive. For comparison: a Russian-made billet was ordered by a Philippine company for $510-515/t CFR. Iranian producers send products to the relevant market at prices of $512-520/t CFR.

It is expected that in the short term the world billet market may grow slightly, as the Russian authorities have recently introduced export duties on billets, which will contribute to a decrease in the supply of raw materials on the market. This factor contributed to the slight increase in prices last week, but since there are fewer and fewer export consumers of products from Russia, the impact on the world market will be limited.

On the European market, in particular in Italy, during the week of September 15-22, the steel billet lost €10/t in price – €490-500/t, although at the beginning of September, product prices recovered to €490-510/t. Weakened demand for finished steel, which was expected to pick up in early autumn, is likely to have affected prices. The negative trend also reflects shutdowns for maintenance of some steel plants.

As GMK Center reported earlier, the world scrap prices in the first decade of September were unstable under the influence of fluctuations in the demand for steel. In Turkiye, scrap grew slightly amid higher freight rates and increased purchases by steelmakers. In the USA, with the beginning of September trading, quotations are predicted to fall. In the Chinese market, prices fell under the influence of increased supply.