The Turkish market is still filled with cheap import billet options, mainly coming from traders and mills for ex-Russia origin material and the market is clearly declining. Buyers understand very well that Russian sellers are somewhat desperate to sell their material and so no one is in a rush to purchase. “With the payment issues, with the delivery risks, with the sanction risks, the actual billet price is not even the main issue now,” a trader said. Still, some transactions are heard. 5,000 mt of billet from Russia has been recently traded at $798/mt CFR Zonguldak, SteelOrbis has learned. As for the other sellers, a trader, Amesco, has been offering billet at around $780/mt CFR, while Russia’s Abinsk has been trying to sell at $790/mt CFR. Some sources report there are billet offers from Azerbaijan at $770/mt delivered to the border, but a lot of market players consider those to actually be of Iranian origin.
Despite the sanctions and the overall risks of working with Iran, more and more talks about the incoming volumes to Turkey have been heard around. “Some of the volumes came in earlier as GCC origin, some were offered as Georgian origin and now as Azeri origin,” a trader said. Others report over 400 trucks with steel billets are stuck at the border with Nakhchivan, saying there may be more controls now after Iran imposed export duties. “Those [billets] were to be distributed in Aliaga, Karabuk and Iskenderun,” a source said.
In the domestic market in Turkey, the number of billet offers is scarce, partly as the producers are reluctant to provide big discounts, while scrap prices are relatively stable. And that would be the case if they would like to compete with the cheap import billets in the falling market. “Rebar is stable more or less and scrap is too, so even though there is not much demand for local billet, it is not advantageous to try to compete with import levels below $800/mt,” a local mill said. In the meantime, some local billet suppliers seem to be waiting for the whole “import hassle with cheap Russian billet” to be over soon, thinking that this would be the chance for them to step up. Particularly, if those of the Turkish buyers, who had booked from Russia earlier, face probable non-deliveries, there will be a billet deficit once again seen in the market in Turkey. Another thing is that some of the local integrated mills prefer to sell pig iron now at high prices and delay domestic billet shipments for now, which can also be an opportunity for alternative domestic sellers. The current billet prices in the Iskenderun region are at $870-880/mt ex-works and in the Marmara region they are at $900/mt CPT, SteelOrbis has learned.
As for the markets other than Turkey, some interest has been seen in North Africa. A buyer from Tunisia purchased around 10,000-15,000 mt of ex-Russia billet at $780/mt CFR, with around $60-65/mt in estimated freight. Egyptian buyers are said to be inquiring, but it seems that the issue with LC payments, which are obligatory, is the big problem when working with Russia. Certain traders who work with Donbass, Iran, and now Russia, may find a way, but it certainly will take time,” a source said. Aside from North Africa, a 50,000 mt billet inquiry has been reported in the market from a Saudi Arabia-based buyer.
Given the recent market developments, the SteelOrbis reference price for ex-Russia billet has been lowered to $715-730/mt FOB, down from the previous indication of $750/mt FOB.