Billet prices in Europe and the Middle East have been weakening in line with the week-by-week decline seen in finished steel product prices. For this reason, billet producers are having difficulties in holding on to a definite price level, and billet buyers are delaying their purchasing activity after each price announcement and each offer in the expectation of a further decline in prices. Without a doubt, the low sales prices and volumes of finished steel products in the export markets are also playing an important role in the above situation.
The billet producers in Turkey, who have been having difficulties in setting a certain price level in both local and export markets, are sometimes announcing billet price levels which are almost equal to rebar prices, particularly in the local market. In this situation, the rolling mills which are dependent on billet purchases are having difficulties in competing with the electric arc furnaces (EAFs). The billet price level announced this week by a producer at the level of $757-760/mt excluding VAT has been met with acceptance as it was ex-stock and for prompt delivery. As a result, 25,000 mt of these billets have been sold. This local producer had offered at different price levels in recent weeks but failed to sell any material. However, this week the producer in question finally met the market's expectations. After the sales at the abovementioned price range, the producer has set its prices at $827-830/mt ex-works, excluding VAT, and has played a great role in determining the billet price levels in Turkey this week, which have been in a range of $800-850/mt ex-works, excluding VAT.
Rebar producers in Turkey had concluded many billet deals during the period when prices were on their upward trend; however, they have been caught on the wrong foot with the recent rapid decline in prices. Currently, many EAFs and rolling mills in the various regions in Turkey are considering what to do with the large billet tonnage which has been left in their hands due to the low demand and the decreasing prices.
The billet market in the CIS is also being affected by the negative market trend. The CIS billet export price levels were almost $300/mt higher six months ago compared to the current level of $730-760/mt FOB. The CIS billet export prices, which were met with great acceptance by Turkish and Middle Eastern producers when they were at high levels, are now at considerably low price levels. There are lower prices offered by international traders compared to the abovementioned levels; however, these offers are generally not being accepted.
It is heard that CIS billet has this week been offered to Italy at $800/mt CFR; however, the offers in question have not been met by acceptance in the Italian market, which has not fully ended its holiday yet.
As Turkish producers' billet export offers are unknown due to the non-existence of demand, even if there was a definite price level, it would still not be clear how much acceptance such a level would gain given the current declining market situation.