Tukey’s billet market has been rather quiet even though import offers of various origins have remained fairly workable compared to domestic production costs in Turkey amid rising import scrap price levels. Still, while rare negotiations continue, no bookings have been reported and the uncertainty in terms of both domestic and export longs sales is the main reason for billet importers being hesitant. The political unrest in Turkey has fueled concerns regarding future longs sales and consumption overall, while before Wednesday this week Turkey had been expecting a seasonal improvement in daily business activity. “With what is currently going on, we are about to face currency rate declines, even higher inflation, and people being even less willing to contribute to steel demand,” a local source told SteelOrbis.
In the meantime, no drastic change has been seen in import billet price levels over the past week. Chinese billet is offered for May shipment at $480-485/mt CFR, with Indonesian billet at $485-488/mt CFR, most sources say. However, according to some reports, one trader has been offering the mentioned origins at $476/mt CFR. Malaysian billet is offered indicatively at $495/mt CFR and slightly above. It is generally believed that the levels of $475-480/mt CFR should be workable for non-Malaysian origins, given that domestic billet production costs in Turkey are now at around $535/mt CFR, based on a scrap price of $380/mt CFR.
Russian billet exporters have been targeting higher prices mainly due to the continued appreciation of the rouble against the dollar. Market sources have all reported offers not below $470/mt CFR to Turkey, which is equivalent to $450/mt FOB. At the same time, some sources reported that the target price of sellers is not below $455/mt FOB for end of May-early June shipment. “Producers hope that by the time they receive export payments by the end of May, the rouble exchange rate will have return to $1 = RUB 100. They made a big mistake selling material in January when the rate was above 100, but loading was delayed for up to two months due to problems at Novo [Novorossiysk port], and now they are receiving foreign currency revenue at the rate of 80,” a trader said. Also, Russian suppliers are going to adapt to the Chinese price and not offer below it.
The SteelOrbis reference price for ex-Russia billet has settled at $450/mt FOB Black Sea, up by $5/mt on average from late last week.
In the domestic market, billet prices in the Izmir region are at $525-530/mt ex-works, down $5/mt from the end of last week, while offers from Marmara are at $515/mt FOB or around $525/mt CFR Izmir. In the Iskenderun region, billet offers are unchanged for now at $530-535/mt ex-works.