At the end of 2024, the broader economic landscape remains heavily influenced by monetary policy. The Bank of Russia's decision to raise its key rate to 21% in October, amid official inflation rates exceeding 9%, marked a drastic measure to cool an overheated economy. While the central bank opted against further rate hikes in December, the elevated rate environment is expected to persist for the foreseeable future. This continues to weigh on domestic industrial activity and export competitiveness.
Black Sea prices remain stable, supported by ruble strength
The Russian billet market has shown relative stability recently, with February delivery prices holding firm in key export regions. Supported by a slight strengthening of the ruble last week, suppliers have managed to maintain price levels in the range of $445-455/t FOB Black Sea. The currency's resilience has reduced the likelihood of any significant price adjustments in the near term.
Scrap price increases support billet bids in Türkiye
In Türkiye, billet bids have seen a moderate uptick, primarily driven by rising scrap prices and the stabilization of local market conditions. Buyers are currently estimating billet prices at $455-460/t CFR or approximately $435-440/t FOB as a starting point for negotiations. This reflects improved sentiment and increased confidence in price sustainability.
Egypt maintains steady demand with stable price levels
Russian billet prices in Egypt have remained consistent, with February delivery offers hovering around $495-505/t CFR or $455-465/t FOB. This stability indicates balanced supply and demand dynamics in the region, with buyers showing moderate interest in securing cargoes at these levels.
Far East faces resistance from Southeast Asian competitors
In the Far East, Russian billets are currently offered at $425-430/t FOB for February delivery. However, these prices are facing resistance in Southeast Asia, where local market conditions and competitive pricing from alternative suppliers make Russian offers less attractive. This suggests potential downward pressure if suppliers aim to capture greater market share in the region.
Looking ahead, Russian billet suppliers are likely to maintain their focus on stabilizing prices amid fluctuating regional demand and macroeconomic uncertainties. The ruble's performance, scrap price trends, and regional competitiveness will remain critical factors influencing export pricing strategies in the coming months. For now, stability defines the market, but underlying volatility remains a risk factor that cannot be ignored.
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