Buyers delay their billet purchases

The uncertainty in the Middle East and North Africa is causing demand to remain weak in the billet markets. In the CIS market, producer prices have not softened much, while no demand can be found at the price levels desired by the producers in general. The overall offer level from billet producers this week was mainly at $615-625/mt FOB Black Sea, but obviously without many transactions concluded. Following billet sales concluded at $610/mt FOB, buyers in the market are no longer interested in price levels above this number.
 
In the Turkish domestic market, local producer Kardemir opened its billet sales at $635/mt excluding VAT for St37 S235JR grade billets of 130 mm x 130 mm x 6-12 m size. MT III-A billets of the same size specifications are priced at $640/mt excluding VAT. Not much demand has been received for the list prices and sales still remain open. Billet offers in the domestic market from other producers were at $625-635/mt ex-works level earlier this week.
 
In the export markets this week Turkish producers offered steel billets at $630-640/mt FOB. Demand from Saudi Arabian buyers has been received at these levels and some producers were able to conclude bookings at these levels. This week some import offers made to the Turkish market from the CIS region were observed at $630-635/mt CFR; however, rolling mills did not show much interest in booking at such levels.
 
Now that the scrap market has softened and new bookings by Turkish producers have slowed down, the direction of the scrap market is uncertain. Therefore, players in the billet market choose to delay their sales and purchase decisions. In the coming weeks, Turkish producers will play an important role with their scrap bookings in shaping billet demand and price levels.