The conditions in the Turkish billet market have remained rather silent and, even though scrap prices in Turkey have increased further, this has failed to support billet prices much, at least so far. The weak rebar market in Turkey and the lack of any rush to purchase billet have been among the reasons for the stable market situation.
Traders have been offering ex-China billets, mainly for ex-January-February shipment, at $480-485/mt CFR to Turkey, which is down by $10/mt from the official offers for this origin last week. Even though official offers on FOB basis have remained high, at $455-460/mt FOB, the sentiment in China has worsened since late last week due to declines in futures prices, as there has been no improvement in fundamentals like demand. Considering the current freight rates, traders expect to get $445-450/mt FOB from Chinese mills in the case of firm bids in Turkey in the near future.
The latest Indonesian billet indication was at $490/mt CFR, with the official offer from the mill for February shipment at $455/mt FOB. Today, December 17, there has been talk that the official offer has been increased by $10/mt to $465/mt FOB, but “I don’t see the reason, even at $455/mt FOB hardly anyone is confirming deals,” a trader said.
Offers for Malaysian billet in Turkey are standing at $490-495/mt CFR and up to $495-500/mt CFR from some sellers. “$500/mt CFR is a good price for a seller, but I don’t see any demand,” an Asian trader said.
There have been no sales from Asia to Turkey over the last couple of weeks as, even with higher scrap prices, captive billet production costs have not been much above the current billet offers. Moreover, “I don’t think that scrap will increase with another leap, so the Turks are not buying billets,” a Turkish trader said.
The SteelOrbis reference price for ex-Russia billet has remained at $440-445/mt FOB Black Sea with the midpoint at $442.5/mt FOB. The latest tradable level for Turkey for small cargoes for January shipment has been at $460/mt CFR at the highest, corresponding to $440/mt on FOB basis. “Prices have to go up, but for now offers are the same, at $440-450/mt FOB,” a trader said.
In the local market in Turkey, billet prices in Iskenderun have been reported at $530/mt ex-works, while last week deals in the region were done at $525-527/mt ex-works. In the Marmara region, the billet price is at $515-520/mt CPT.
