Black Sea billet prices continue to follow the Turkish scrap price dynamic, with both Turkish and Russian billet suppliers active in the export market.

Demand has calmed somewhat after exploding in the first two weeks of March, and prices appear to have stabilised. Turkish mills continue to offer more billet than rebar and Russian trade is re-establishing itself amid sanctions, Kallanish learns from market sources.

Turkish billet prices have softened more in the past week, to around $885-890/tonne fob Turkey for large volumes. A lot was sold at this price to Latin America late last week, which had been Ukrainian mill Metinvest’s regular business before the Russian invasion halted market activity.

Smaller lots with lower freight to North Africa are offered at higher levels of around $900/t fob, but demand has also softened somewhat on high volumes booked earlier in March. Egypt, the largest buyer, is also struggling with its recent 12% currency devaluation against the dollar, making financing more difficult.

Financing remains the biggest issue for all origins, not only Russian. A large volume of trade at higher prices has translated into higher financing requirements, which banks are not hurrying to satisfy, especially in the current climate of uncertainty, traders say.

Russian material financing is understandably difficult, but not impossible, considering the new-found flexibility by Russian suppliers, they add. Initially, selling mills requested 100% pre-payment, but now the non-sanctioned mills are finding new routes of payment, working with buyers' local banks in their currency, and agreeing to discounts and supplying on a cash on delivery basis. But trade is still complicated by the small size of the Russian fleet and Black Sea route disturbances.

Turkey remains Russian billet's main buyer, as Egypt fell back on higher costs and banks' reluctance to finance. Russian billet is offered at $800-850/t fob Black Sea, depending on the seller, but sales are made at lower levels, sources suggest. Several Russian lots were booked at $830-850/t cfr Turkey, down from $870-880/t cfr earlier in the month.

But some traders who were active in the Russian billet trade say they are not even considering the material anymore, because of reputational risks with banks and clients. Most Russian billet trade is direct business now, a trader says, after mills' representatives visited the country's buyers last week.