The billet market in Turkey, which has been weakening since before the holidays, is now set to see an even deeper decline, following the recent sharp drop in import scrap prices. Buyers in Turkey, as well as some of the sellers, believe billet prices, which have already dropped by around $40/mt since late April, will see an additional decrease of at least $20-30/mt.
The most recent scrap deal to Turkey has been closed from the UK at $480/mt CFR for HMS I/II 80:20, shocking the market and strengthening the downward expectations in most of the steel segments. The square billet import offers from Russia, which were at $720-740/mt CFR at the end of April, decreased this week to around $680-685/mt CFR and some of the sellers have been targeting $700/mt CFR, SteelOrbis has learned. Last week, a 10,000 mt deal was closed at $685/mt CFR Izmir, sources say. However, after the sharp drop in the scrap segment, some of the market players expect the next deals will be done at $650-660/mt CFR. “Most probably we will be forced to sell between these levels. According to scrap, it is not that low,” a source said.
Aside from Turkey, Russian billet sellers have been targeting to sell to nearby destinations. In particular, a 10,000 mt lot was sold to Egypt last week at $705/mt CFR, market players reported. As a result, the SteelOrbis daily reference price for ex-Russia billet is now settled at $640-650/mt FOB, down by $10-30/mt over the past week.
In the local market in Turkey, most of the producers prefer to withhold active offers as they are trying to understand the workable market price and the acceptable level for them in terms of production costs. Two mills in the Iskenderun region are voicing $780/mt ex-works, while no firm offers have been heard in the Izmir and Marmara regions. “There is no price today in the market and the situation in scrap makes all the talk for billet meaningless for now. We will see what the next import deals are and what people would be ready to pay for rebar,” a producer told SteelOrbis.