Over the past week, Turkish steel producers’ domestic billet offers have decreased by an average of $10/mt week on week to $370-380/mt ex-works since their production costs have declined due to the increased momentum as of the beginning of last week in the downward movement of import scrap prices in Turkey which had started in mid-January. However, Turkish buyers’ bookings of both domestic and import billet is still slack since demand for Turkish finished steel is still weak at home and abroad.
Currently, buyers in the global markets prefer to postpone their billet bookings and adopt wait-and-see stance, as they think that billet prices will decrease further in the coming period due to the sharp declines in scrap quotations. Accordingly, demand for ex-CIS billet in target markets is weak and, while ex-CIS billet offers to Turkey are at $375-390/mt CFR following the latest fall in billet offer prices from the CIS to the export markets, Turkish buyers still consider this price range to be on the high side.
This week Chinese billet suppliers, whose most recent billet offers to the export markets last week were at $410-420/mt FOB, are not currently active in the export markets due to Chinese New Year holiday. Market players are wondering what kind of pricing strategy Chinese billet suppliers will adopt after they return from their holidays, as they are expected to play a significant role in determining the future trends of the steel markets.