The increasing demand for raw material and billet in the last couple of weeks in the Middle East market, and in Saudi Arabia in particular, has seen a further acceleration. Turkish producers continue to receive demand from these regions and have booked an important amount of billet tonnage since last week. The tight supply of semi-finished steel in the Middle East is increasing the demand for billet imports, providing a further lift to the already climbing billet prices.
The Turkish domestic market has seen important changes since last week, with billets moving up yesterday to $630-635/mt ex-works, from levels of $600/mt ex-works early in the week. The price increase announced today by local integrated producer Kardemir at $642-645/mt ex-works excluding VAT has further strengthened the domestic market. Export offers by Turkish producers have fluctuated along with the continuously rising raw material prices, and have commonly been made in the range of $610-620/mt FOB.
Different offer levels were heard in the CIS as well, where there is no availability for April delivery. It is known that CIS producers are not in a hurry to quote their new prices as their order books are already full. The strong increase expected in iron ore prices is also keeping the producers from determining price levels for the moment. Since early this week, offers given from the CIS to Turkey have been at $585-595/mt CFR, and are expected to be revised upwards following the recent hikes in Turkey. The most recently quoted $570-590/mt FOB levels pronounced by the CIS producers are expected to increase further shortly.
Billet markets are not expected to shift to a downtrend in the near future, due to the demand revival and the strength of raw material prices. Most believe that the billet markets will have to adjust themselves to the current increasing trend as long as raw material prices continue to rise strongly.