Sentiments in Turkey’s billet import market have become a little more negative, mainly due to concerns in the longs export segment, sliding scrap prices and the difference between lead times for billet from Asia and for deep sea scrap. In the meantime, despite some attempts by the Chinese to raise prices, the general import offer range for billet to Turkey has decreased over the past week by $5/mt to $450-475/mt FOB depending on the origin.
In particular, Chinese offers are now closer to $470/mt CFR, while at the end of last week there were traders’ indications at $464-465/mt CFR. Indonesia is still at $470/mt CFR including $4/mt extras for manganese, with no talk about actual deals. In the meantime, a Malaysian mill, which was offering at around $480/mt CFR last week for 44,000 mt, according to sources, had sold a cargo to a trader, but it is not yet clear if this cargo has already been sold to a Turkish mill. Current workable price levels for Malaysian billet in Turkey are evaluated as not being higher than $470-475/mt CFR.
Although the market especially for Asian billet seems to be around the bottom pricewise, market players expect only moderate demand for these cargoes. While the prices of $465-475/mt CFR seem workable against captive billet production costs in Turkey evaluated at around $490/mt, the lead time for most Asian cargoes is the problem. “The lead time is complicated. Billet for March shipment means arrival in early May. If you buy scrap today with mid-February shipment, the arrival is in early March,” a source commented to SteelOrbis.
As for Russia, the price level has slid from $455-460/mt to $450-455/mt CFR for February shipments, with a deal reported to have been closed at the end of last week at $449/mt CFR Turkey. The SteelOrbis daily reference price for ex-Russia billet to be shipped from the Black Sea decreased by $5/mt $430/mt FOB and has a slight potential to soften further.
