CIS billet suppliers are keeping offers firm for the remaining August-casting volumes, as Chinese demand is livening up and prices look set to rebound.

China is the only market that is poised for a demand and price recovery in the forthcoming month. Its buying potential alone is obviously strong enough to lift sentiment in the somewhat flailing Black Sea export billet market, sources tell Kallanish.

From around $400-405/tonne cfr, Chinese buying interest for billet has increased to $410/t cfr China for concluded deals, including non-ASEAN origins, such as India and the CIS. A lot of Indian billet has been booked at this level in the last two days, as well as a small lot of Russian material, for dispatch from Russia’s Far East.

More enquiries are expected next week, as sellers are holding material, with indications of prices at around $380/t fob Black Sea. These are not yet workable amid rising freight rates, but could be possible next week, when Chinese billet demand returns in earnest, provided rebar futures continue to perform well, traders explain.

Freight rates for a 30,000-tonne cargo to China from the Black Sea are at around $40/t today, meaning some sacrifice may have to be made by sellers, considering also the 2% import duty into China. Traders are confident there will be sales next week, not at $380/t fob but at around $370-375/t fob, which, for large consignments, "…is a very good price," one source admits.

Demand elsewhere remains subdued, but small lots are being contracted in East Africa, Tunisia, and Turkey, from small mills working on prepayment and shorter-lead-times basis, supported by traders. These mills are at the $365-370/t fob level, although one southern Russian mill is offering at $380-385/t fob for August-casting material, with 20% prepayment. 

A recovery in demand is not expected this year anywhere, except for China, with the fourth quarter marked by several traders as a possible starting point for a rebound.