Most large billet importers in Turkey are currently maintaining a wait-and-see stance, following several bookings closed two weeks ago. The reported bids are mainly quite a bit below the incoming offers, particularly for Asian origins, given the longer lead times. While rebar pricing has remained weak, the limited billet allocation in both domestic and import segments in Turkey has been pushing scrap suppliers to resist the pressure from buyers.
In the domestic market in Turkey, integrated producer Kardemir has announced $545/mt and $560/mt ex-works for billet depending on the steel grade, which is $5/mt lower than the previous price. According to local sources, Kardemir has managed to trade at least 20,000 mt of billet, while others report the total tonnage is almost 27,000 mt. “This is not great demand for Kardemir’s billet, which means the price is not attractive enough against rebar and merchant bars, at least at the moment,” a trader told SteelOrbis. In other regions of Turkey, the prices vary within $550-555/mt ex-works Izmir, $560-565/mt ex-works Iskenderun, and around $555/mt CPT in the Marmara region. “In Iskenderun [region], prices may be higher for a while since, due to Bastug's absence, supply over there is less now,” a source mentioned.
The discounts provided for the billet locally, though they are minor ones, have slightly increased the pressure on import offers. Following the ex-Indonesia and ex-Algeria sales at $526-528/mt CFR, Turkish mills are not in much of a position to pay higher than that for non-toxic material. Currently, the indicative prices for both mentioned origins are at around $535/mt CFR, while the targets are below $530/mt CFR. “There is an expectation that Asian billet will not be workable in Turkey for a while and I think it will take at least another month for a 50,000 mt order to reappear, while 10,000-20,000 mt lots would mean freights higher by $8-10/mt,” a trader said. Ex-China offers are evaluated by market players as being at $540/mt CFR, unworkable at the moment.
As a result, market sources expect that the available Algerian billet allocation, which is assessed at around 50,000 mt for now in traders’ positions, is expected to be sold at quite good prices, given the advantage of the shorter lead times and better freight rates. In the meantime, the availability of ex-Black Sea billet, particularly from Russia and the occupied territory of Donbass, is limited.
The SteelOrbis reference price for ex-Russia billet has corrected down again - to $490-495/mt FOB Black Sea, losing $5/mt this week. A few more deals have been rumored from the CIS to Turkey. One sale for 3,000 mt of ex-Belarus material has been rumored at $517/mt CFR, while another one for a larger volume has been heard at $520/mt CFR Aliaga for end-of-July shipment. Neither of the rumored exporters confirmed the information but said that this is the current market level. According to some sources, a contract price of $520/mt CFR included some extras.
Also, information about a 10,000 mt deal for wire rod grade billet done last week was disclosed lately, at $528/mt CFR, while the base price is equivalent to not above $520/mt CFR. “I don’t think that CIS offers can be higher than $520/mt CFR now,” one trader said. “I would say that the tradable level if someone needs to push volumes right now is closer to $485-490/mt FOB,” another trader said.
In Egypt, some negotiations continue with potential buyers even though billet stocks in this market are rather high at present. According to sources, ex-Ukraine offers are at $560/mt CFR effective, while Asian material is priced at around $550-555/mt CFR. As for ex-Russia offers, they are evaluated at $540/mt CFR and slightly below.