Up to the beginning of this week, long product prices in Turkey and the Middle East were characterized by overall downward movement. Due to the decreases in long product prices, end-user demand for long products and rolling mills' demand for semi-finished products have also started to drop down. Ex-CIS billet prices have this week declined to the level of $360/mt FOB, while Turkish origin billet prices have this week weakened to around $420/mt FOB Turkey.
The billet price level of $475/mt + 18 percent VAT announced by a local Turkish billet producers on Tuesday, November 18, has not met with acceptance in the local Turkish market, as long product prices have been on a downtrend since the middle of last week. Turkish billet prices, in general, may follow an upward trend if a scrap deal with large tonnage is concluded or if there is an increase in end-user demand. In the absence of these two eventualities, no price increase is expected to be seen in the Turkish billet market.
Billet prices have this week also decreased in Iran compared to last week's levels. While billet prices in Iran were at $620-650/mt ex-works last week, prices have this week seen a softening to $520-560/mt ex-works.
Although billet price increases are in strong, direct correspondence with raw material price increases, billet prices are not met with acceptance after a certain price level if demand for long products tightens. The last three weeks have provided a clear example of this scenario. As a result, CIS and Turkish billet prices may see a recovery in the upcoming weeks in the event of an increase in demand for long products, particularly in the Middle East.