Square billet market of Turkey has been going through some drastic change in 2019. Uncompetitive costs of using foreign semis for rebar rolling versus own steelmaking have resulted in a drastic reduction of the import billet inflow. Turkey purchased 964,025 mt of square billet in January-July this year, by 53.7 percent down compared to the same period of last year, Turkish Steel Producers’ Association (TCUD) reports. “These days the merchant bar producers are the main customers for import billets while most mills prefer scrap bookings,” a producer told SteelOrbis.
Turkey has shown a significant increase in the billet exports this year, having surpassed 1 million mt over seven months compared to 251,138 mt, shipped in January-July 2018. Early this year a number of market players shared their expectations that billet exports from Turkey might reach 2 million mt in 2019. However, taking into account the drastic price fall, seen in almost all benchmark segments, the goal is hardly achievable, SteelOrbis understands. “When it comes to the point when the producer has to sell, CIS has much more room to provide discounts, but they can still keep at least minimal margins compared to Turkey,” an Iskenderun region-based producer said.
Along with the costs balancing issues, continuously weak rebar segment is another reason for Turkey’s billet market to reshape. In the January-July period, the long steel production in Turkey fell by 24.6 percent year-on-year (to 11.7 million mt), dragged down by the drastic decrease in the domestic consumption – by 41.5 percent, to only 6.3 million mt, TCUD reports. “Turkey has put all the effort to exports as local demand will remain stuck for a while,” a trader noted.
