Though this week Chinese suppliers have mostly withdrawn the lowest billet offers to Turkey, the overall market situation has failed to improve much. The sharp fall in local prices in Turkey and the aggravated negative mood have continued to rule the market, and so the pressure on ex-Russia billet prices have even increased.
The lowest offers seen in Turkey last week from China at $520-530/mt CFR have not been seen anymore. Most offers from China are at $540/mt CFR now and the lowest seller can accept for a large volume of 40,000 mt at least is $530/mt CFR. But taking into account the very uncertain outlook for the market in general, there has been no one who can consider buying any large volumes like that. “The Chinese have calmed down, but the oversupply is not fixed yet. I believe that the level of $530/mt CFR is still available from Asian suppliers for large volumes. But demand itself is still absent,” a trader said.
As for the smaller volumes offers to Turkey, some traders have been discussing $535/mt CFR for ex-Russia billet, but no new deals have been reported so far. A few Russian suppliers have decided not to offer this week, seeing such negative developments locally in Turkey. Bids for ex-Russia billets have fallen to $520-525/mt CFR and hardly above, according to sources. This price translates to $480/mt FOB Black Sea.
Also, offers from Iran to Turkey have been heard at $510-530/mt delivered by truck.
As a result, import billet prices in Turkey have settled at $530-545/mt CFR, with the lower end of the range up $10/mt since last week.
In the domestic market in Turkey, Kardemir opened billet sales at $560-565/mt ex-works, which is below most expectations in the market, as in the last round of sales in late October the price offered by the mill was at $605-610/mt ex-works. Despite a sharp drop, the producer has failed to push large sales volumes, with just slightly above 10,000 mt sold. “The results of the Kardemir sales are very disappointing,” a local source said.
The SteelOrbis' daily ex-Russia reference price has declined to $490-500/mt FOB, down from $500/mt FOB Black Sea last week.