Russian billet pressure on scrap overstated

Russian billet pressure on scrap overstated

London, 18 May (Argus) — Low-priced exports of Russian steel billet have been widely cited as a major contributor to the ongoing downward pressure on ferrous scrap and steel rebar prices, particularly in Turkey, but the full scope of this pressure appears to be highly limited.

Russian billet was first heard offered on export at comparatively lower prices than Turkish billet prices in the fourth week of March, four weeks after Russian military forces moved into Ukraine. Only some of Russian suppliers' overseas customers are willing to do business due to the risk of sanctions or banks not willing to finance trade.

The volume of an average Russian billet cargo to Turkey is about 9,000t. No more than 25 Russian billet cargoes have been sold to Turkey or any of its surrounding competitors, such as Egypt, in the past six to seven weeks since Russian suppliers started to offer at aggressive prices.

This is less trading volume than estimates circulated in the market that five Russian billet cargoes are being sold to Turkey every week. And it means that no more than 225,000t of Russian billet has been purchased by Turkish importers at prices significantly lower than the wider billet market level.

That volume