The trade and negotiation processes for billet have remained silent in Turkey, but the mood has worsened over the past week due to the collapse seen in ex-Asia offers and the persisting downturn in the import scrap segment. In addition, even though billet allocations for acceptable lead times are currently limited, buyers are not in a mood to purchase due to the generally negative market sentiment and the lack of export sales volumes.
Ex-Asia billet offers have taken a nosedive this week and, moreover, they have the potential to decrease further. Ex-China billet offers are now at $565-575/mt CFR depending on the seller, down from $600/mt CFR seen early last week. However, despite the sharp decline, even such a level is not considered workable. The latest indications from India and Indonesia have been at $580-585/mt CFR, while Malaysia has voiced $575/mt CFR. According to the market sources, the workable levels for all but duty-free origins should be at $560/mt CFR at the highest or below, taking into account the current market circumstances.
Some bids, however, have been reported at $550-560/mt CFR for Russian and Donbass origins versus suppliers’ indicative targets at $580-585/mt CFR. In the meantime, some April shipment small cargoes from Russia are available at $590/mt CFR, but the level is negotiable. The SteelOrbis daily reference price for ex-Russian billet has been set at $545-555/mt FOB, down $10/mt over the past week on average. “There is no market now, so there is no market price. We need to see how it goes and how low it falls,” a Turkish mill told SteelOrbis.
It is worth mentioning that the market players report some Russian and Donbas billet sellers are facing certain difficulties, following the recent arrest of Metallhouse president Can Unsalan with the accusation of having violated US sanctions against oligarch Sergey Kurchenko. “People [Turkish billet buyers] are afraid to buy especially from Donbass after this case. They will either have to go very low, or switch to even greyer markets,” a trader mentioned. Another issue is that Russia’s Metalloinvest is also expected to face some difficulties selling its lots to previously regular buyers in Turkey. Sources expect that, once the already announced US sanctions against Metalloinvest companies are in force, some Turkish buyers will refuse to deal with them or will push for much lower price levels.