Severstal sells 5,000 tonnes of billet to Saudi Arabia

Severstal, Russia’s second-largest steelmaker, has sold 5,000 tonnes of billet to Saudi Arabia, two sources have told Steel First.

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The company has been focusing on hot rolled coil, cold rolled coil and plate in its exports sales over the past few years.

The move to billet was triggered by weakening rebar demand in the Russian market, and domestic producers’ willingness to stand by their current prices with reduced outputs and opting to export, Steel First understands.

The 5,000 tonnes of billet made at Severstal’s 1 million-tpy Balakovo mini-mill in Russia’s Saratov region were sold at about $450 per tonne ex-works, according to one source.

Transport costs between Balakovo and Russia’s Black Sea port of Novorossiysk were about $60, according to the same source. This would put the deal price at $510 per tonne fob.

A second source said that he had got a billet offer from Severstal at $515 per tonne fob Novorossiysk.

Steel First’s weekly export price assessment for CIS-origin billet was $505-510 per tonne fob Black Sea on September 8, down by $10 per tonne at the top end of the range from the previous week.

Demand for rebar in Russia’s central market has been gradually slowing over the past two or three months, after a period of steady growth since the start of the year.

Steel First’s price assessment for A500C 12mm rebar on September 8 was 26,140-26,150 roubles ($701.83-702.10) per tonne cpt Moscow, including VAT, compared with 26,140-26,200 roubles ($701.83-703.44) a week earlier.

Severstal said in March that it was planning to export some of the rebar made at Balakovo to other parts of the CIS and to the Middle East.

The rolling facilites at the Balakovo mini-mill, about 1,000km south-east of Moscow, were launched in December last year, while its electric arc furnace (EAF) started steel production in March.

Alona Grynenko in Kiev contributed to this report