Trading activity for billet in Turkey has remained at minimal levels with only occasional deals being closed in the import segment and domestically. In the meantime, buyers’ price ideas have softened over the past week and some suppliers have decreased their offer levels, while some have preferred to continue to maintain high prices, but for small cargoes and for immediate shipments. Overall, economic and financial expectations are quite negative in Turkey and the whole situation is already weighing on market players’ payment activities.
According to sources, last week a 10,000 mt cargo from Malaysia was booked at around $540-545/mt CFR, down from $550-555/mt CFR initial offers. The latest offers from both Malaysia and Indonesia are still at $540-545/mt CFR, but $535/mt CFR is considered to be achievable. No firm offers have been reported from the GCC region, but some buyers suggest that hardly anything above $530-535/mt CFR would be workable given the lead time.
Overall, Turkey’s interest in large billet cargoes and in longer lead times is quite low, particularly due to payment issues. “The [buyers] do not really want to open LCs for large tonnages and therefore find it easier to purchase 3,000-5,000 mt lots from Russia with payments in Turkish liras,” a trader told SteelOrbis.
In particular, a total of 6,000 mt of billet has recently been sold by a Russia-based trader at $545/mt CFR in a couple of deals, versus offers last week at $550-555/mt CFR. The same levels are still offered by some sources for ex-Donbass billet depending on the buyer, but some sellers, according to sources, are already negotiating at $540/mt CFR. “This makes buyers believe they can push for $525-530/mt CFR and we are not quite there yet,” a supplier said. It is worth mentioning that, while no active talks have been reported for larger billet lots from Russian mills, though buyers’ price ideas for them are closer to $530/mt CFR the smaller ex-Russia cargoes for immediate shipment from Rostov and Novorossiysk are on offer at $575/mt CFR Black Sea ports of Turkey and at $580/mt CFR Aliaga.
The SteelOrbis reference price for ex-Russia billet for the standard lead time has been lowered slightly by $5/mt on average to $510-515/mt FOB Black Sea, where the higher end of the range corresponds to the recent deals for small volumes to Turkey, while the lower end reflects buyers’ price ideas for July shipment cargoes.
In the local market in Turkey, integrated Kardemir has newly opened billet sales at $595-600/mt ex-works depending on the steel grade, which is down $25/mt from two weeks ago. However, by the time of publication the producer has managed to sell up to 40,000 mt of billet, while its sales are still open. In the Izmir region, the latest offers for small lots have been placed at $600-605/mt ex-works, while in the Iskenderun region the levels of $595-600/mt ex-works are heard, but no deals have been closed just yet. In the meantime, small truckload billet cargoes from Iran are on offer at $500-510/mt DAP, mainly in the Iskenderun region.