The impact of the global financial crisis has also been seen in the widespread downtrends which characterize the iron and steel industry, which is second in terms of size only to the petroleum industry. This week, after the announcement by one mill of billet prices at $452/mt excluding VAT, other billet producers have decreased their prices to the range of $450-470/mt ex-mill, excluding VAT. Price levels for large tonnages are standing at $450/mt, whereas prices for small tonnages are somewhat higher at $470/mt, both excluding VAT. In addition, Turkish mills' billet offers for the export markets are in the range of $460-480/mt FOB Turkey.
During the 42nd week of 2008 (October 13-17), the decrease range of ex-CIS billet prices was larger than that for Turkish billet. Billet prices which were standing at levels of $410-420/mt FOB CIS at the beginning of the week have decreased to the range of $350-370/mt FOB CIS by the end of the week. Also, it is heard that offers of Russian billet to India and Iran are standing at levels of $460-470/mt CFR. This week, the main reason behind the decreases in billet prices has been the weak demand coming from rolling mills, as well as the declining scrap prices in the Ukrainian domestic market.
In the coming days, sliding billet market prices may lead the Turkish mills to make downward adjustments to their prices in markets where ex-CIS billet and Turkish billet have been competing with each other, even including Turkey's domestic market. No Chinese offers have been heard in Turkey for around one month now - a situation which has continued during the current week. The 25 percent export tax which China has imposed on billet is the main obstacle preventing the Chinese mills from competing in the international billet markets.