CIS-based square billet exporters have predictably become more bullish in their price expectations as the week passes. The positive mood is mainly due to the situation in Turkey, where the scrap price trend is evaluated as a cautiously upward one and where local and import billet prices have been rising. In addition, although the local rebar market in Turkey is still not so healthy, some sizeable sales, reportedly closed to overseas markets, have also been supporting the positive mood in the billet segment.
The large CIS-based billet producers are now testing the market with offers for February production at $615-620/mt FOB and even above, versus $600-605/mt FOB in previous deals. “We consider $610/mt FOB as a definitely achievable level for today, but definitely there is a certain sense in trying to hit higher levels,” a supplier told SteelOrbis.
In Turkey, buyers report offers for March shipments at $650-665/mt CFR depending on the seller and the region, while last week the deal and offer prices were in the range of $630-645/mt CFR. Suppliers of ready billet cargoes are also in the market and have been able to achieve high levels. A 3,000 mt lot was recently sold at $680/mt CFR Aliaga, while a trader’s offer to the northern part of Turkey is $5/mt lower.
The domestic market in Turkey has also been supporting the general positive sentiment. Another small billet sale was fixed at $665/mt ex-works Iskenderun. Another lot has reportedly been traded at $660/mt ex-works to the Marmara region, but this was denied by the seller. Most billet suppliers in Turkey are now offering at $680/mt ex-works, but $670-675/mt ex-works is considered to be workable.
As a result, the uptrend in the Turkish market, though it may be temporary, is expected to provide support for ex-CIS billet sales in the near term. “Everyone tests higher [billet] offers today and the big boys [Turkish mills] may buy now. But others [smaller buyers] cannot purchase for March anyway as they are not even fully booked for finished steel for February yet,” a trader told SteelOrbis.
Given the improved market sentiment, the SteelOrbis daily reference price for ex-CIS billet has increased by $5/mt to $605-610/mt FOB.
