This week, Turkish billet market has seen a minimal business activity since some of the market factors needed to be evaluated. Most of the buyers have been hesitant to take a purchasing decision, taking into account the currency fluctuations, triggered by an unexpected increase in Central Bank’s interest rates. In addition, the freight rates from the Black and Azov Sea have increased significantly due to the restarting grain season and war-related risks. As a result, the suppliers have been finding it rather difficult to match the workable CFR Turkey and FOB price levels. In addition, the further import scrap trend is questionable for now and once again the parties need time to evaluate it.
The SteelOrbis reference price for ex-Russia billet has been corrected to $450-460/mt FOB Black Sea by the end of this week. This level is still $5/mt down from the lower end of the reported late last week, but above by $7.5/mt from that seen in the middle of this week. The sellers’ resistance to cut prices again, rising freights and some hopes that the situation in Turkey will not worsen in the near future have been behind this correction. “Only few offers [for September] are at $500/mt CFR [Turkey, translating to $460-470/mt FOB],” a trading source said. “I think traders can provide $480-490/mt CFR,” a Turkish mill said.
A deal for 3,000 mt of prompt shipment Russia billet has been done at $515/mt CFR Iskenderun. “Novo-Iskenderun has extra $8/mt freight for 5,000/mt lots. This is prompt shipment, that's the reason why it is a little expensive,” a source from Turkey commented.
As for other origins of import billet, the indications from Malaysia have been reported at $530-535/mt CFR and these levels are not considered workable even for the duty free origin. “Even though $590/mt ex-works rebar price is accepted by the local market, there is still too much risk with the expected cost increase, financial issues and lack of cash flow in the construction sector,” a trader told SteelOrbis.
In the domestic billet market of Turkey, the indications in the Izmir region are evaluated at around $545/mt ex-works, while in the Iskenderun region – at $530-535/mt ex-works, down from $550/mt ex-works targets, voiced earlier. No local trade has been reported this week as the buyers are waiting to evaluate the market situation.