The billet price trend in Turkey has been subject to debate this week, taking into an account the many factors currently having an influence on the level of offers and on buyers’ and sellers’ policies. Ex-Asia and particularly ex-China billet offers have increased significantly, following the announcement of stimulus packages and the consequent rise in futures and iron ore prices in China. However, Turkish buyers are not ready for higher billet prices given the long lead time in particular and considering the currently weak import scrap price trend. Ex-Black Sea Russian and Donbass billet prices have also increased and some interest in these may be seen, particularly for small lots with short lead times. In the meantime, local producer Kardemir has announced new sales at stable offer levels, but the revised conditions regarding discounts for volumes and payment terms actually indicate a price around $10/mt higher than last week.
Today, September 26, Kardemir has announced its 150 mm billet at $530/mt for S235JR material and $555/mt for B420 grade, both on ex-works basis. Given the supplier’s slightly changed conditions which now include a one percent discount for cash payment, a $5/mt discount on volumes above 2,500 mt and a $10/mt discount for lots above 5,000 mt, Kardemir’s price is estimated at $514.7/mt ex-works. Sources expect Kardemir to sell some volumes, given some lack of domestic supply and the scarce number of ex-Black Sea offers for small tonnages. By 5 p.m. on September 26, there were unconfirmed reports that Kardemir's billet sales amounted to a minimum of 40,000 mt.
The general level of local billet offers in Turkey is estimated at $530-550/mt ex-works, but most local mills in regions other than Karabuk are offering at the upper end of the range and even higher for lots with immediate shipment. In particular, around 10,000 mt have recently been traded by a Marmara region-based mill at around $550/mt FOB, sources reported. In addition, a livelier rebar market may support producers’ sales. In the meantime, import billet prices from Asia have strengthened, particularly from China, giving more opportunities for billet sellers locally in Turkey and sellers of other import origins with a shorter lead time.
Asian billet in Turkey has strengthened price-wise, mainly following the increase in futures prices and the improved mood in China, and so offers to Turkey have gained around $10-15/mt since earlier this week. The latest indications from China in particular have been reported at $500-505/mt CFR, versus $485-490/mt CFR seen earlier. Ex-Indonesia billet is now evaluated at $490/mt CFR minimum, while earlier the level of $470/mt CFR was believed to be achievable, versus offers at $485/mt CFR at that time. Higher billet offers in the import segment, according to some sources, have failed to provide any positive boost to sentiment at the moment given the weakness of scrap prices. In addition, although rebar prices have increased due to limited supply in some regions in Turkey, most mills are expected to continue to seek import billet prices from Asia at below $490-500/mt CFR.
Offers for ex-Russia billet have also been on the rise. One of the main mills in Russia was asking for $465-470/mt FOB Black Sea on Tuesday, after a deal at around $470-475/mt CFR to Turkey last week. The new FOB level translates to $485-490/mt CFR Turkey for sizable lots. Billet from the Donbass region, the Ukrainian territory occupied by Russian troops, has been on offer at $460/mt FOB or $485/mt on CFR basis for small lots, versus $480/mt CFR earlier.
The SteelOrbis reference price for ex-Russia billet has increased slightly to $460-470/mt FOB Black Sea, up by $5/mt on average from yesterday and up $5-10/mt from last week.