Billet suppliers from the Black Sea region are currently facing a weak market, with the main buyers, namely, Turkey and Egypt, holding back their purchases. Turkish mills and re-rollers are watching the mood in the import scrap segment, which is currently rather negative, and are expecting the return of China, while the Egyptians are reluctant to restock for now due to currency problems.
The Turkish domestic billet market has failed to improve much, while supply in certain regions has remained limited. The integrated producer Kardemir has announced billet sales at $580/mt ex-works, for S235JR grade only this time, down $5/mt over the past two weeks. By the time of publication, the producer has concluded deals for 10,500 mt of billet, SteelOrbis has learned. “The mood is still rather negative and, although there is not much billet around, people are reluctant to buy and definitely are not yet ready to accept price increases,” a source said. In other regions of Turkey, the billet price range is mainly estimated at $590-595/mt ex-works with no large deals reported. In the meantime, rebar prices have weakened slightly for export and in the domestic market the mills are having some trouble in their efforts to spur buying. Some buyers share the view that next week domestic billet prices will fall to $570-575/mt ex-works.
In the import segment, the absence of China during the holiday period has basically halted the billet offerings from Asia, including those from Malaysia and Indonesia. Both are indicatively estimated to be available at $560-565/mt CFR at present and maybe at levels $5/mt higher for a shorter lead time. An ex-Algeria position cargo is still on offer from a trader at $560-565/mt CFR for early March shipment. A similar level has been voiced for one ex-Ukraine cargo offered to Turkey.
Billet from Russia and Donbass are also not actively offered to Turkey, while the evaluated workable levels have slid by at least $5/mt over the past week to $540/mt CFR maximum, which translates to $515/mt FOB for small lots, though even $10/mt lower levels are being pronounced by some buyers. “I guess, if there was a serious seller and a serious buyer in the current market, nothing above $530-540/mt CFR would work and even that is in doubt,” a trader told SteelOrbis.
The latest offers from a mill in Donbass, the Ukrainian territory temporarily occupied by Russian troops, have been reported at slightly above $520/mt FOB, but this level is no longer considered as reflecting the market conditions. “They last sold at $525/mt FOB two weeks back, and I think they did well to sell, as now everything is going down,” a trader said. He assessed the tradable level at $510/mt FOB at the moment. Some Russian mills have also been trying to keep offers at $520/mt FOB Black Sea, but the highest possible in negotiations is heard at $515/mt FOB for destinations other than Turkey.
In Egypt, traders, who are selling ex-Russia billet, have cut offers from the high $565-575/mt CFR levels reported last week to $560/mt CFR. But “all Egyptians are reluctant to buy due to the currency situation,” a seller said, adding that the buyers’ price ideas are still at $550-555/mt CFR maximum.
The SteelOrbsi reference price for ex-Russia billet has been settled at $510-517/mt FOB Black Sea with the midpoint at $513.5/mt FOB, down by $4/mt on average over the day and $5.5/mt over the week.
