Russian suppliers have been aggressively increasing offers by the end of this week, supported by better moods in Turkey with higher scrap prices, hiking local billet and rebar prices and soaring freight rates. However, not much activity has been reported as buyers are cautious in making deals in such actively rising market.
Most offers for ex-Russia and ex-Donbass billet have been assessed at $480-500/mt CFR for September shipment, while earlier in the week the producers have been assessing $475-480/mt CFR as workable. “Some producers [from Donbass mainly] are ready to give $480-490/mt CFR. But this is the suppliers’ side,” a trading source said. Another trader said that offers are already at up to $500-505/mt CFR for ex-Russia billet and not only for prompt shipment, as reported earlier this week, but also for September, adding that there were no new sales to Turkey. “I believe from next week everyone will target above $500/mt CFR, even from Russia,” the third source said.
Recent offers to Turkey are translating to $455-470/mt FOB Black Sea. The FOB level has increased not that much since early this week as freight from Black Sea to Turkey have soared amid the start of the grain season and higher risks. For instance, for larger volumes of 10,000-20,000 mt the rate has increased from $15-17/mt earlier this week to $23-25/mt now, while for smaller lots the freight is at $30/mt or higher.
Rising billet offers have pushed Turkish buyers to be more active in negotiations. As a result, a cargo of less than 15,000 mt of ex-Ukraine billet has been traded to Turkey at $500/mt CFR. The price represents the tradable level for “clean origin”, while buyers are reluctant to accept even close to this for Russian material. It is possible that some Turkish buyers may remain interested in buying “clean” Ukrainian billet in the rising market, taking into account advantage in price compared to Asians and much lower risks that in deal with sanctioned Russian semis.
At the same time, the indicative levels for ex-Asia billet in Turkey has been assessed at $525-535/mt CFR amid the recent rises in the local billet market in the country. After Kardemir sales at relatively low level of $510-520/mt CFR, some producers in Iskenderun and Marmara have voiced new offers at $550/mt ex-works.
The SteelOrbis reference price for import billet in Turkey has increased from $470-480/mt CFR earlier this week to $480-500/mt CFR. At the same time, due to the rising freight rates, the price for ex-Russia billet has been at $455-460/mt FOB, up by $15/mt over the week, but stable from what was reported earlier this week.