While the billet market in Turkey is still in some confusion regarding the workable price levels and the consequences of Russia’s imposition of export duty, local integrated producer Kardemir has announced and closed its new billet sales. Moreover, many market players have estimated the workable import levels by looking at the acceptance of Kardemir’s price among Turkish buyers.
Kardemir has increased its local 150 mm x 150 mm billet price by $7/mt since the previous round to $532/mt and $542/mt ex-works depending on the steel grade. According to sources, the producer succeeded in selling over 40,000 mt and then closed its sales.
Market sources assume that both Kardemir’s price and sales volume indicate the absence of panic in the Turkish market or a possible uptrend in the import segment, which was expected by some following Russia’s export tax announcement. “There is no panic at all. No one believes Russian issues will have an impact on prices,” a trader said.
While there are hardly many firm offers for ex-Russia and ex-Donbass billet in the Turkish market, players are estimating the workable prices at levels closer to the pre-export tax prices. “It is early to offer [for us]. But if things remain as now, I think the Turks will not confirm anything above $505-510/mt CFR. They need a minimum of $20/mt lower than Kardemir,” a billet supplier told SteelOrbis. Others believe some customers would voice around $500/mt CFR in bids, which is in line with the mid-September levels.
Taking into account the current situation, SteelOrbis has decided to decrease is daily reference price for ex-Russia billet by $7.5/mt on average to $475-480/mt FOB. At the end of last week, some sellers were targeting $500/mt FOB, but they failed to achieve this price. Before Russia’s export tax announcement, the reference price for this material stood at $470/mt FOB.
The availability of other billet origins in Turkey’s market at relatively reasonable prices is another obstacle to bullish sentiments from Russia. Moreover, according to sources, there has been a trade for an ex-Algeria cargo to Turkey at $516/mt CFR for October shipments versus $525-530/mt CFR offers last week. The information has not been confirmed by the time of publication. Some Turkish mills believe the workable price for alternative origins should be at $515/mt CFR maximum. “The bids which I receive from Turkey are at $510/mt from third countries and $515/mt CFR for European and Malaysian origin. At those levels nothing is possible for a trader in between,” a trading source told SteelOrbis. The most recent offers from Malaysia have been reported at $535/mt CFR.