The billet trade has been almost muted in Turkey this week since buyers have become even more cautious while some market fundamentals have started to change. The recent rebound in the import scrap segment, seen in the latest couple of deals, has resulted in somewhat livelier local rebar trade and a slight increase in pricing. Still, many are cautious in terms of taking this situation as a solid improvement, given the rather slow end-user demand. In addition, market players are mainly waiting for official news from China to be disclosed tomorrow before taking major business decisions.
As for billet, currently captive production costs in Turkey are considered to be at around $495-500/mt, and so the workable import prices are lower than the abovementioned mark. “With scrap at $340-345/mt CFR, the market is in some kind of equilibrium. It is good for the suppliers and not bad for Turkish mills. Above that - the situation is questionable for the mills as there is no confidence in rebar,” a trading source said.
Currently, there is almost zero interest in ex-Asia billet cargoes, particularly as these are available for end-of-March and early April shipments. Ex-China offers are indicative and are in line with last week at $490-495/mt CFR, while the same levels are available for ex-Malaysia duty-free origin. The ex-Indonesia price is evaluated at $490/mt CFR, with a $5/mt discount applicable. Overall, according to market players, $485/mt CFR is the highest workable price available even for cargoes with a shorter lead time.
The SteelOrbis reference price for ex-Russia billet has settled at $440-445/mt FOB Black Sea, up by $5/mt from last week. Rare offers have remained at $440-450/mt FOB, but trading has been limited. “Billet offers are stable for me. Sellers didn’t cut them too much. Scrap is on the rise. This is good, but it is not reflected in billet deals,” a trader said. Also, some sellers have not been voicing new offers so far, waiting for the market to settle. This week, Turkish buyers’ price ideas have increased from $435-450/mt CFR to $460/mt CFR, which is in line with the previous small-volume deals. Still, there is no rush among customers from the Karabuk area, specifically following the earlier restocking with local Kardemir material at $495/mt ex-works for S235JR.
In the local market in Turkey not much activity has been seen. In the Marmara region, offers are at $530/mt CPT, while in the Iskenderun region some deals for 5,000-7,000 mt have been closed at around $525-527/mt ex-works. Earlier this week, the offers stood at $530-537/mt ex-works.