Prices for billets in Turkey have been dropping inevitably due to poor demand and more aggressive offers coming from Asia. The sharp increase in competition has put significant pressure on ex-Russia billet prices as suppliers have a limited number of markets where they can sell, and, even though overall offer volumes from Russia are reduced, this is not helping to sustain prices.
The SteelOrbis reference price for ex-Russia billet has declined to $500-515/mt FOB, with the midpoint at $507.5/mt FOB Black Sea, down by $10/mt from the previous level.
The Turkish billet market is rather silent this week, as buyers are holding back their demand, citing low finished steel sales. The number of offers from Russia is still limited to only a few suppliers voicing $560-570/mt CFR, but there are no takers at this price. Bids for ex-Russia material are rare and do not exceed $530-540/mt CFR. In fact, $540/mt CFR is the level of the latest 3,000 mt transaction, closed to the northern part of Turkey in the past week. “We are not offering actively, as there is no demand, so in fact there is no point in talking,” one of the sellers of ex-Russia billet to Turkey said.
Apart from low demand, another even more important factor putting pressure on Russian billet suppliers is increased competition with Asian sellers. Aside from Russia, Turkey continues receiving offers for billets of alternative origins. Iran is in the market with a 10,000 mt offer at $540/mt CFR, while prices from the GCC have been reported at $565-575/mt CFR, similar to last week’s levels. China is at $540-550/mt CFR and, although there is some unconfirmed information about a booking at $540-545/mt CFR last week, the most recent bids are at $530/mt CFR maximum. “Suppliers from Russia, even against their will, have to compete with these offers from China and Asia,” a trader said. “We are receiving the same bids from Turkey as in the ex-China deal, at $540/mt CFR, but we can offer only small volumes like 3,000 mt,” a source from Russia said.
Ex-Malaysia pricing is quite aggressive: the offers are at $555/mt CFR Turkey, though for December shipments. As a result, the current import billet prices in Turkey are within $540-565/mt CFR, versus $540-580/mt CFR a week ago.
In the domestic market in Turkey, Kardemir reopened billet sales at $605-610/mt ex-works, but terminated trade within several hours. The workable price level in other regions is estimated at $590-610/mt ex-works, but the problem is there are hardly any offers from the Turkish mills. Some market players reported the price idea from an Izmir region-based mill is at $620-630/mt ex-works, which is certainly not workable.
Suppliers in Russia’s Far East region have also been in a difficult situation as recently only Taiwan and China have been regular buyers in Asia. The last deal from Russian Far East ports to Taiwan has been done at $505/mt CFR, as SteelOrbis reported earlier this week. But also rumours that Russia has sold some tonnages to China at $455/mt CFR on average have started to emerge today. Though this could not be confirmed by the time of publication, this level is in line with the general tradable level to China. “It sounds like they have to sell and so will sell at whatever price they can get from China,” a trader commented.