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Russian military forces have already seized effective control of Crimea, the Ukrainian peninsula on the Black Sea where Moscow has a naval base.
“I think the situation will get worse before it gets better,” one trader said. “I do not see an easy solution, honestly.”
Steel First assessed CIS-origin billet prices at $480-495 per tonne fob Black Sea on Monday March 3, down from $493-498 per tonne on the same terms a week ago.
This brought the assessment to its lowest point since June 17 last year.
One CIS mill concluded a deal for March-rolled billet at $520 per tonne cfr Saudi Arabia late last week, the trader said. The price was equivalent to about $485 per tonne fob Black Sea.
March-made billet from another CIS mill changed hands at $500 per tonne cfr Turkey at an earlier date, the source said. The price translated into about $480 per tonne fob Black Sea.
Ukraine’s Industrial Union of Donbass (ISD) closed its order book for March-rolling billet at $495 per tonne fob Black Sea.
The instability in Crimea is a problem for ISD, which exports material through the Crimean port of Sevastopol.
The producer is expected to switch its exports to the Azov Sea port of Mariupol in the very near future, the first trader said.
ISD was offering April-made material at $500 per tonne fob Black Sea, according to the source. “[ISD is] offering slowly,” the trader said. “[There is] no pressure to sell.”
Steel market participants are concerned about the situation in Ukraine, sources told Steel First.
The owner of the country’s largest steelmaker, Metinvest, has called on his compatriot businessmen “to unite in their efforts and spare no expense to assist in the peaceful reconciliation” of the political and social crisis in the country.
Metinvest sold some of its March-production billet at $545 per tonne cfr Dominican Republic late last week. The price was equivalent to $505 per tonne fob Mariupol, according to the first source and a second trader.
However, the first trader described the Dominican deal as “a special case”, while the second trader suggested the billet market is changing direction.
Metal Bulletin’s daily index for HMS 1&2 (80:20) scrap delivered to Turkey closed at $342.39 per tonne cfr on March 3, up from $338.01 on February 17.
Ukrainian producer Elektrostal will offer its April-made billet at $500 per tonne fob Mariupol, the second market participant said.
"[Elektrostal] always starts from $500 per tonne fob,” the first trader said.
The mill sold its March-rolled billet at $480 per tonne fob Azov Sea, according to the first source.
In Russia’s Far East region, Amurmetall closed a tender for 10,000 tonnes of March-rolled billet at $495 per tonne fob Vanino this week, a third trader said.
Two other international trading companies bid $493 per tonne fob for Amurmetall’s cargo, according to the same source.
Sentiment in the CIS billet market remains weak, with concern growing over the situation in Crimea, sources told Steel First.