With general steel demand still coming from the Far East, raw material (including billet) prices have been maintaining their uptrend. With the CIS producers continuing to offer billets to the Far East, it is now also heard that the Turkish producers are starting to offers billets to this region as well. In fact, one Turkish producer is reported to have concluded a billet deal to China in the past week.
No sign of an improvement in demand is seen in Europe, the Middle East and Turkey due to factors such as the holiday season, the approach of Ramadan and sluggish local markets. For this reason, producers from countries with high production capacities such as Turkey, Ukraine and Russia have turned their attention to the Far East (where local markets are active for the time being). In this context, Turkish producers have been maintained their scrap purchase activity and, in this way, have provided support for the rising trend of scrap prices.
This week, Ukraine's billet offers to the export markets have been at $430-450/mt FOB. Demand from the Far East for CIS billets has increased to such a degree that the price gap between Ukrainian billets and rebars has been reduced to just $10-30/mt.
On the other hand, billet prices in the local Turkish market have this week increased by $15-20/mt compared to last week and are now standing in the range of $460-480/mt ex-works. However, rolling mills operating in the local market which produce rebar have not shown any interest in these billet prices.
In general, if demand from the Far East continues in the future, no softening is expected to be seen in billet prices.