CIS billet export prices have diverged, as conflicting fundamentals are pulling market participants' expectations in opposite directions.

The sellers' camp is firmly split between integrated and scrap mills, with the former having sold large October-casting volumes to Southeast Asia and North Africa at lower prices. Scrap-based mills with significantly shorter lead times are offering at slightly higher prices.

A southern Russia scrap-based mill sold a medium-sized consignment to a trader at $367/tonne fob Black Sea last week, having rejected bids at $360/t fob for early-October load-readiness. A Ukrainian vertically-integrated producer sold a large consignment to North Africa at $360/t fob, and a Russian vertically-integrated producer sold three large lots, effectively closing its October-casting books at $355-362/t fob.

Supply is limited as several producers are not in the market, including two Ukrainian mills and one Russian scrap-based producer, who prefers to re-roll as much as it can into finished product, traders say. Softening scrap is firmly pushing CIS billet sentiment down, but thus far mills are resisting lower bids, aware of limited allocations. The expected reduction in supply is supporting the optimists' camp, which considers the current price level to be approaching the bottom.

Turkish bids at $360-370/t cfr are only able to secure eastern Ukrainian material, with several small lot sales having been concluded. The market is watching Turkish scrap import prices, which appear to still be softening, for further direction.