Local Turkish billet market supported by higher scrap prices
With import scrap prices in Turkey increasing by an average of $18.5/mt since February 3 following the previous overall decline of around $75/mt recorded in January, Turkish billet producers’ production costs have increased, leading them to raise their domestic billet offers by $10/mt this week. As a result, domestic billet prices in Turkey have reached $370-380/mt ex-works, while demand has improved slightly week on week, though it is still at low levels.
Market sources state that Turkish steel mills still prefer to import scrap instead of billet due to cost advantages. Accordingly, demand for import billet in Turkey is still weak.
Following the Chinese New Year holiday (Jan. 27-Feb.2), Chinese suppliers had reduced their billet export prices this week by $10/mt to $400-410/mt FOB. However, on February 7-8 global iron ore prices have increased and demand for billet in the local Chinese market has improved slightly. As a result, Chinese billet export quotations have settled in the range of $410-430/mt today, February 8. On the other hand, Turkish buyers have shown little interest in Chinese billet for a long time now and no new Chinese billet deal has been heard in Turkey.
The rises recorded in global scrap prices since February 3 and the upward movement of Chinese billet quotations have caused a rise in ex-CIS billet prices. CIS-based suppliers have increased their billet offers to Turkey today by $7.5/mt to $385-395/mt CFR. Meanwhile, Turkish steelmakers still consider this price level to be on the high side and demand for ex-CIS billet in the country is at low levels.