Import billet prices in Turkey have firmed up somewhat over the past week and may strengthen further due to higher scrap deal price levels. In addition, supply on the billet side is still limited, since for now it seems that only Russian and ex-Donbass material is in the picture. However, there are still doubts over whether billet will shoot far beyond $600/mt CFR, unless there is another considerable increase in import scrap prices.
“After the announcement of the reduction of electricity and gas prices, clients became confused. Scrap started to be more attractive for integrated mills. Re-rollers probably thought that, as local costs of production declined, local billet prices could be better and started to wait. That is why import billet prices above $600/mt CFR didn’t work out even despite scrap, which keeps going up,” a Turkey-based trader said.
The general range of the latest import billet offers from Russia has been reported at $590-595/mt CFR from the few suppliers who are present, up $10/mt on the lower end. One of them has just sold 3,000 mt of billet for shipment in the second half of February at $591/mt CFR, down from the initial $595/mt CFR offers. Another Russian mill has been offering this week at $590/mt CFR Aliaga. Despite no offers being heard for now at the lower levels, some buyers consider the $585/mt CFR price to be still achievable. Still, many expect $600/mt CFR to be the normal offer level for “decent” Russian billet. “I believe the price for March [shipment import billet] should be $600/mt CFR. But Turkey has not confirmed this level [as tradable] yet,” a trader selling Russian and ex-Donbass billet told SteelOrbis.
However, in the near future a possible further price rise for scrap will provide the needed support for the tradable level of import billet, especially in case of higher local billet prices.
The SteelOrbis reference price for ex-Russia billet has increased by $10/mt since late last week to $565-575/mt FOB Black Sea owing to the improvement seen in Turkey.
In the domestic market, the latest billet deals for a total of around 15,000 mt have been closed at $648-651/mt ex-works, up by around $25/mt week on week. Overall, it is believed there is nothing below the $640/mt ex-works mark in domestic offers.