Against the background of the recently increasing raw material costs, Turkish and some European EAFs and rolling mills who had been purchasing large tonnages of billet from the CIS continued their billet purchases from this region last week. Scrap prices reached to the level of $300/mt CFR Turkey during the week in question, while end-user demand for finished steel products did not yet increase to the expected levels in the international markets. On account of the abovementioned factors, mills who are very anxious to cut their costs have preferred to purchase billet from the CIS instead of producing it themselves.
Last week, ex-works billet offers given from Ukraine and Russia were in the range of $400-410/mt FOB CIS, whereas offers given from traders stood at the level of $390-400/mt FOB CIS. Turkish rolling mills have concluded deals at these levels.
In the Turkish domestic billet market, prices last week showed an increase as compared to the previous week, standing in the range of $440-470/mt ex-works, excluding VAT. However, the billet prices in question are at quite high levels according to the rolling mills, especially considering that domestic rebar prices have been standing at $500-510/mt ex-works, excluding VAT. As regards scrap booking concluded by Turkish mills over the last week, the most recent booking was concluded at the level of $295/mt CFR Turkey. With scrap prices increasing continuously, mills who have been forced to increase their billet and consequently finished steel prices are hoping end-user demand will show an increase in the coming weeks.