Russian billet prices on the decline

Russia’s billet market is witnessing price adjustments, though not as steep as many customers had anticipated. Russian suppliers recently reduced their billet export prices, now quoting offers around $470-475/t FOB Black Sea, while shipments are mainly planned for January. Despite the price dip, these levels are still above what most customers in the region are looking for, leaving the market at a point of cautious anticipation as we move into 2024.

The main factor holding Russian producers back from further price cuts is the anticipated removal of Russia’s export duty in January. The duty, which has added a layer of cost pressure to Russian steel exports, is expected to be abolished, giving exporters a stronger competitive edge without the need for immediate price reductions. Until then, suppliers are maintaining a “wait-and-see” approach, likely aiming to protect their profit margins while assessing demand fluctuations in the coming months.

In Türkiye, Russian billet offers were reported at around $480-495/t CFR ($460-475 FOB Black Sea) this week, a slight decrease from the $490-510 range of last week. The small dip suggests that regional demand is softening, potentially as Turkish buyers hesitate in hopes of securing lower prices after the New Year, when Russian export duties are expected to be lifted.

With the outlook still uncertain, Russian producers are likely to remain cautious in making any major pricing shifts before January. The potential abolition of the export duty is a significant factor for both Russian suppliers and international buyers. If the duty is indeed removed, it could allow Russian exporters to offer more competitive prices, possibly leading to an uptick in shipment volumes early in the new year.

However, for now, many buyers are playing the waiting game, betting that price levels could ease further once the policy change is in place. This measured approach on both sides of the market could lead to stable but slightly muted trading activity through the end of the year.