A significant surge in prices in China, following the renewed talk about productions cuts and higher futures prices for steel and raw materials (coal and coke mainly), has naturally resulted in a jump in import offer levels for ex-China billet in Turkey among other markets, creating uncertainties and worries. While billet suppliers generally welcome the price increase in the segment, buyers are not so happy about it as demand for finished long steel still fails to provide support and so workable prices for rebar and wire rod are not so high.
Currently, many traders, normally active in the international billet trade and particularly in sourcing billet from China, are now aiming to observe the market situation and avoid placing firm offers. However, market players are evaluating ex-China billet offers in Turkey at not lower than $480-485/mt CFR for September shipments, up from around $470-475/mt CFR earlier. Moreover, some indications have been reported at as high as $490-500/mt CFR, which is clearly not workable but reflects an upward market trend, at least for now.
The Indonesian billet mill is currently at $455/mt FOB for October shipments, which, according to sources, translates to around $492-495/mt CFR. The latest price from Ukraine for September shipments has been reported at $490/mt CFR, but the level might be revised up slightly, buyers think. The latest deal for August shipment was closed last week at $480/mt CFR base. Another Ukrainian mill, according to sources, is now at $500-505/mt CFR.
Based on the sharp rebound of ex-China billet offers, the indications from Russia and Donbass have also been pulled up by several suppliers. The offers to Turkey are now mainly at $460-470/mt CFR, versus $450-455/mt CFR in the most recent deals, though fresh bids still hardly exceed $450/mt CFR, sources report. In addition, according to market players, one of the Russia steel producers, which are not so regular in the market, has sold 20,000 mt of billet at $440/mt FOB to the MENA region. The SteelOrbis reference price for ex-Russia billet has been increased from $430-437/mt FOB to $440-450/mt FOB or by $11.5/mt on average.
The domestic billet prices in Turkey are also expected to shift upwards from $490-500/mt to $500-510/mt ex-works, but the rebar market situation will define whether or not the higher billet offers will be accepted. The latest rebar export offers have been set at $545-550/mt FOB, versus $530-540/mt FOB last week, SteelOrbis has learned.