Turkish and CIS mills cut steel billet offers, buyers still delay bookings

In the Turkish domestic market, the decline in long steel prices that started before the June 12 general election has continued this week. Consequently, steel billet prices have softened further. Although steel billet supplies are on the short side and there has not been any scrap booking heard lately, slack demand in the Middle East and North Africa (MENA) is exerting pressure on steel billet prices. While hot weather is affecting the construction activity in MENA region, Ramadan in August is expected to further slow down steel billet demand in the region. On the other hand, since August is the holiday season in most European countries, expectations for steel billet demand in this region are not positive.
 
In the meantime, with its new price list dated June 14, 2011, Turkish steel producer Kardemir had opened its sales for S235JR grade (St37) billets of 130 mm x 130 mm x 6-12 m size at the level of $683/mt ex-works, excluding VAT, and had also opened its sales for MT III-A grade billets of the same size at the level of $688/mt ex-works, excluding VAT. Compared to the previous price list, the new billet prices have decreased by $27/mt. Despite this price cut, Kardemir has not witnessed much demand and its steel billet sales are still open. In the Turkish domestic market, local prices stand at $670-680/mt ex-works on actual weight basis.
 
Turkish mills' steel billet export offers, which were at $680-690/mt FOB last week, have softened by $10/mt this week, reaching $670-680/mt FOB on actual weight basis, for August shipments. However, lower offers are also heard in the market. Nevertheless, buyers have not started to book at this new price range and are still maintaining a wait-and-see stance.
 
SteelOrbis has learned that steel producers from the CIS are currently offering July production 3SP-5SP grade steel billet to export markets in the price range of $665-675/mt FOB, decreasing by $10/mt as compared to last week. In the meantime, CIS traders' steel billet export offers stand at $655-660/mt FOB for late July shipments, and even lower prices can be heard.