Russian exporters are facing growing difficulties with receiving payment, which is affecting their involvement in international trade, market participants inform Kallanish.

In December, the US strengthened sanctions against financial institutions assisting Russia. Consequently, these institutions may now be at risk of being denied access to the US financial system, potentially leading to their demise.

Even if transactions are done in roubles, yuan, lira, or dirham, dealing with Russian businesses under sanctions or connected to the military has become too risky.

As a result, Turkish and Chinese banks, particularly, have reported significantly reduced volumes of transactions involving Russian businesses.

“More banks in Turkey, China and UAE increased their requirements regarding more strict compliance, checks etc., as they are afraid of secondary sanctions from the USA. So, there is more time for compliance required by banks which increases transfer times by up to a week or so,” one trader says.

“Most likely this is temporary. But transferring money will cost more. And it seems there will be additional costs,” another source notes.

In Turkey, there were reports about deals done last week for Russian-origin billet to Black Sea region rerollers in the range of $547-553/tonne cfr. This was for February-shipment material in lots of 5,000 tonnes totalling 20,000t. The prompt-shipment material is typically traded at a premium.

Nevertheless, some traders are of the opinion that, given the recent decline in scrap prices in Turkey, this deal price may not be applicable for the ongoing week. “The scrap price has fallen in Turkey, so it’s unlikely to sell [billet] at above $540/t cfr this week,” one trader says. Bids do not exceed $535-540/t cfr Turkish Black Sea ports for February-shipment billet.

Egypt was facing a sharp depreciation of its pound, with the black market exchange rate now more than 50% weaker than the official rate. This is the country’s most severe economic crisis in decades, according to reports, with Egypt having devalued its currency three times since early 2022.

Despite the three consecutive increases in Egyptian local rebar prices during January, these hikes were just to compensate for the Egyptian pound devaluation. The scarcity of hard currency remains a significant issue, causing disruption for businesses and hampering affordability of importing billet by Egyptian rerollers.

Offers of Russian origin in Egypt are heard at $560/t cfr. “No one can import now [in Egypt] because of the jumping dollar against the Egyptian pound,” an Egyptian reroller opines.

As a result, Russian billet is assessed at $510-515/t fob Black Sea, narrowing up by $5/t compared to a week ago.

Russian-origin wire rod workable levels are reported at $545-565/t fob, compared to $555-575/t fob a week earlier.