The billet market in Turkey has been a reflection of different price trends this week, affected by various factors. On the one hand, ex-China offers have indicated a clear increase, following the slight uptick in futures prices and the effect of the strong yuan. However, this uptrend, coupled with still relatively high pricing for import scrap in Turkey, has not led to an upward push for the billet market overall. The main reason is that rebar sales in Turkey are quite slow, which has brought prices down $5/mt further in the local and export markets. “Costs have remained high for weeks now while rebar keeps sliding. It puts the mills in quite a difficult situation, especially taking into account that rebar production is already reduced,” a trading source told SteelOrbis.
The latest offers from China are now standing at $478-485/mt CFR for May shipments, while the first indications after the holiday stood mainly at $475/mt CFR. Sources report that China is quite strong now in its intentions to maintain prices above $480/mt CFR, while demand from the Turkish side is expected to be scarce and hardly above $473-475/mt CFR. No firm indications have been heard from Indonesia and Malaysia, while Ukraine is out of the market due to the war-related production cuts and more attractive prices in alternative destinations.
The SteelOrbis reference price for ex-Russia billet is stable at $435-440/mt FOB Black Sea since, even though some rises in offers have been seen from China, most Turkish buyers have been refusing to accept high price levels for import material. The tradable level for ex-Russian billet in Turkey has been assessed at $460-465/mt CFR for small and medium-size volumes. “If there was demand for Chinese billets, then with its price increase, clients would look for substitution [in Russia in particular]. But the situation in Turkey is not like that,” a trader commented.
There has been a rumor that a sizable tonnage of Russian billet has been sold at an extremely low level, equivalent to below $420/mt FOB Black Sea to Syria. And even though this could not be confirmed by the time of publication, market sources believe the deal was in fact done because of the urgent need of the producer to push volumes as its previous sales to Turkey were not enough in terms of tonnage. This is why this price has been excluded from the SteelOrbis reference price.
Another Russian producer is heard to have sold 20,000 mt of 150 mm billet to $440/mt FOB Black Sea, but this information is subject to doubt, market sources said, considering that this mill is one of the most sanctioned in Russia.
In the local market in Turkey, most offers are indicative and are at $500-505/mt ex-works versus the reality of $535-555/mt ex-works workable prices for domestic rebar. As a result, there is a pressure on local billet suppliers, but their current costs are evaluated at around $515-525/mt, which does not leave them room for large discounts. As an exception, there has been a deal at $520/mt ex-works, which was more a result of diminished ex-Iran supply to the region and, most probably, the buyer’s necessity for a short lead time, SteelOrbis understands.