The apparent recovery of CIS billet prices at the beginning of last week aligned perfectly with market expectations at the end of the previous week, but have failed to last, Kallanish learns.

There have been just a few large sales to traders who were buying for back-to-back sales and positions, although some of the latter look to have morphed into back-to-back sales towards mid-week. This is because buyers' workable price expectations remained significantly below offers, market participants say.

CIS producers indicated $500/tonne fob as their working price initially, and managed to sell at $480-490/t fob range to traders. But modest demand coupled with ample availability from Mediterranean suppliers created tight competition, indicating the need for sellers to correct offers before further sales can be made, market sources suggest.

Most North African buyers indicate $500/t cfr equivalent as possible working price levels, but firm bids are scarce, according to traders. Billet is available from CIS and Turkish producers at around $500/t fob Black Sea, and Italy at €415/t ($480/t fob), with lower freight and shorter transit. Turkish exporters this week rejected some bids at $490/t fob, but, considering current scrap import prices, they could sell "... any volume at $485/t fob" according to one market participant. Another also says meanwhile that they "... could go lower" [... than $490/t fob]. There have been reports of sales of larger Turkish billet lots at around $485-490/t. 

Turkish longs producers have low finished product order books, according to market sources, and it is not surprising that they are intending to sell billet at the highest price possible. Some billet volumes have been sold to Southeast Asia by Turkey and the CIS at $525-530/t cfr, replacing Iranian volumes. Turkey needs more finished products sales to North American and European markets however for the Black Sea billet market to find some equilibrium, market sources opine, but these are now almost out of reach.

Meanwhile, some market pariticipants expect September European quota fulfillment to increase significantly as July sales start arriving in European ports. Expectations of this happening also prevent European buyers from booking Turkish material right now, traders say,