Turkish mills still remain caught between insufficient longs sales both locally and abroad and limited supply of cheap billet options with short lead times, while the options to average out costs by again buying cheap raw material from Russia have been shrinking due to the ongoing situation in the Black Sea-Azov Sea region. As a result, Turkish buyers have been reaching out for other options in the billet segment and some deals have been closed for Indian material, as expected. The regular options from China, although similarly priced, are for a longer waiting period and, though bids for Chinese billet have moved up to more reasonable levels, actual deals have not been reported yet.
According to sources, a total of 50,000 mt of Indian billet for end-of-August shipment has been booked by two buyers in Turkey's Marmara region at around $505/mt CFR. Last week, the realistic offer indications stood at $497-505/mt CFR, sources said. “The freight and payment conditions are not known for this deal and, for let's say October arrival, it is a good booking for Turkey,” a source told SteelOrbis.
Ex-China offers have remained relatively stable at $503-506/mt CFR for October shipments, while the most recent bids from a couple of regular buyers have been reported at around $493-497/mt CFR, depending on the customer and volume. The most recent offers for 30,000 mt from Malaysia have been heard at $515/mt CFR, with the workable level assessed at around $510-512/mt CFR, SteelOrbis understands.
The SteelOrbis reference price for ex-Russia billet is stable at $455-460/mt FOB Black Sea, considering rare offers for small volumes at $505-507/mt CFR Turkish Black Sea for September shipment, and freight not below $45/mt. “It may get even higher… I don't think that before October and November there will be normal freights,” a Turkish source said.
However, even the higher freight rates are not a full solution and there a very few shipowners considering entering Novorossiysk, especially following the recent developments. In particular, just today, August 12, two major Russian grain terminals (with a total capacity of 15.6 million mt per year) at Novorossiysk have suspended operations after Ukrainian drone strikes.
