Another increase in offers by CIS billet mills is preventing sales, as buying appetite turned softer on the back of lower China prices and rising fears of a second Covid-19 wave.

Offers of Russian billet produced in July by coastal mills are now in the region of $380-390/tonne fob Black Sea, while the Ukrainian vertically-integrated supplier indicates $380/t fob for August-shipment material, Kallanish learns from participants. Not one large Russian producer has any July-casting billet volumes left, traders say.

There is demand in Saudi Arabia, but with quotes at over $400/t cfr, the buying mill has not committed to booking any CIS billet, although negotiations may still be ongoing. Traders cite $360/t fob as a workable price both to Saudi Arabia and Morocco, where buyers are willing to pay around €365/t cfr. This nets back to $360/t fob once payment terms, duty and traders' commission have been taken care of. Turkey is not actively sourcing material, having bought a sufficient amount of scrap and seen prices stop rising, traders note.

Physical demand remains a problem, as some countries' industries are not expected to recover fully this year, and the finished long products market is still weak. All eyes are on China now where a fresh outbreak of Covid-19 in Beijing has already affected both rebar and hot rolled coil futures prices (see Kallanish passim).