Demand for billets in some of the Middle Eastern and Southeast Asian markets has become more active this week, in line with the strong performance of raw material prices.
Ready material supply is tight in the CIS and billet producers in this market seem not to be in a hurry to compose new prices for their billets, as they have already collected a good amount of orders for their April production. The lowest offer at $520/mt FOB early this week was no longer available towards mid-week, and producers are slow to quote new offer levels, with some of them already starting to increase their prices.
In Asia, buyers have been postponing their purchases due to the continuing lack of certainty surrounding raw material prices. However, looking at the climbing spot iron ore prices and also seeing that Asian producers have started to accept higher scrap levels and to conclude bookings, billet offers to this market are quoted at higher levels now. Buyers are starting to come back to the market in this region also under the impact of price increases by Japanese and Taiwanese producers.
Demand in the Middle East and southern Europe is also indicating a strong performance, as the supply of billets continues to be tight in these regions.
In Turkey's domestic market, the billet price level is at $550-555/mt ex-works, with a rise of about $10/mt, by certain producers by mid-week as the scrap market showed no sign of softening. CIS offers are not really competitive in the Turkish market. Turkish producers have been active in the export markets since last week due to awakening demand from overseas. Increasing demand from Asia has resulted in numerous bookings to this region, while Saudi Arabia, with a revival in its domestic market, is also showing interest in booking Turkish billets. Average booking levels of Turkish billets have been in the range of $550-555/mt FOB.
As the raw material market maintains its strength and the Far East market has not yet settled the raw material price issue, the billet market is expected to continue climbing in the short term at least, most market players believe.