Billet market returns to normal conditions

After the billet markets reached record levels, a slight price adjustment was observed in the markets last week and this week. Prices for billets heard in the local Turkish market were at $420-425/mt at the beginning of the week. However, Turkish steel mill Isdemir raised its St 37 billet to around $435/mt on Friday. This price increase was actually unexpected in the market at all, as domestic and export billet prices were at lowest level at the beginning of the week, compared to two weeks ago. Isdemir's price increase created a positive effect both in billet and long product markets. On the export front, the offer range is wide and there are offers available in the range of $405-425/mt FOB. It is heard in the market that minimills' offers, which almost closed their June orders for long products and/or have no opportunity to sell not much billets, are at $425/mt FOB, and the offers by mills that need to conclude billet sales are rather close to $405/mt. Prices asked for CIS origin billets rose to $400/mt FOB Black Sea ports at the beginning of April. However, these prices were adjusted to $380-390/mt FOB levels later on. SteelOrbis is informed that there were sales concluded at these levels to be shipped to Middle East and Gulf region. On the other hand, Italian customers concluded purchases at $405/mt CFR levels. CIS origin billets are currently being offered to Italy at $400-410/mt CFR. However, most of the rolling mills in Italy prefer to wait. Turkish rolling mills did not show any interest to $400-410/mt CFR Turkish port offers till the beginning of April. Having remained flat in Middle East, Europe and Gulf long product markets this week, the prices led to calm market conditions in Mediterranean for both Turkish origin billets and CIS origin billets. However, billet sellers are relaxed since CIS producers sold their May deliveries and even they have orders on hand for June. Furthermore, the strong demand in the Far East supports this situation. Turkish producers generally are full in rebar and wire rod production till the end of the June. Furthermore, taking into consideration the current billet and goods prices, scrap costs are not much high. Billet demand in both domestic and overseas is in good fix mainly due to the strong goods markets. Therefore, Turkish producers seem not to feel pressure for their sales.