Trading activity in the local Turkish billet market is currently at very low levels amid the ongoing economic and political uncertainties in Turkey and due to the weakness of both domestic and international demand for Turkish finished steel. Despite the weakness of demand, domestic billet quotations in Turkey have remained stable week on week at $400-410/mt ex-works since no change has been observed in import billet prices given to the country.
Against the backdrop of Turkey's inward processing regime (under this scheme mills have to give a commitment to export the finished products they produce from imported billet), Turkish buyers are currently postponing their import billet purchases as demand for Turkish finished steel in international markets is still at low levels. Despite this situation, ex-CIS billet offers to Turkey have remained unchanged week on week at $405-425/mt CFR. However, market sources state that demand for ex-CIS billet has declined significantly in CIS-based suppliers' target markets and so in the short term ex-CIS billet export offers are expected to fall.
Chinese billet export quotations, which were at $415-425/mt FOB in the middle of last week, closed the week in question at $420-430/mt FOB, while at the beginning of the current week they increased to $430-440/mt FOB against the backdrop of the rises seen in the Chinese steel futures market. However, as domestic demand for billet in China has decreased ahead of the Chinese New Year holiday, Chinese billet offers to the export markets declined by $20/mt today, January 18, to $410-420/mt FOB. Market sources believe that Turkish buyers, who had considered Chinese billet offers to be on the high side for a long time, are not expected to conclude purchases at the price levels in question.