The CIS billet export market livened up last week as enquiries from buyers increased, but sales were scarce as mills pulled back to reassess continuously shifting market fundamentals, Kallanish notes.

Just as some participants had started to anticipate a rebound, scrap prices declined, losing $30/tonne in the last two weeks and $50/t during the last month. The drop enabled Turkish suppliers to re-enter the market, while imported billet requirements reduced. Some sources assess that Turkish billet importing will resume if CIS billet prices correct a little more as scrap-fed CIS mills re-enter the market after several months of absence. Supported by lower scrap prices in Russia, billet exports could become economically viable again.

Currently, CIS scrap-based coastal mills are rejecting $360/t fob bids. The stance is set not to last however, with a majority of market observers citing $350/t, not $360/t fob as the psychological floor that the market will end up testing. Some traders point out that with enquiries already circling around $390-400/t cfr for large volume cargos from buyers in southeast Asia, availability exceeds demand, and this will continue to pressure prices. This dynamic will also be supported by the fact that some North African new producers are ready to export billet for the first time,

With buyers pushing for more discounts, CIS billet suppliers have taken a break, having sold out a considerable part of October casting volumes. But the break may not last, as more price decreases are expected by the end of this week, as scrap continues to slide. 

Some traders point out that availability should decrease considerably in order to stop the downtrend.