The market has been full of rumours about one Russian supplier reselling volumes which were earlier booked at $650/mt CFR Turkey and then declined by the customer as the market weakened substantially. Last week, there were reports that the mill had sold 18,000 mt of billet to a Turkish customer at $565/mt CFR, but its seems that the negotiation failed and this week the supplier decided to divide the volume and sold it to different customers at lower prices. According to market reports, one small lot has been renegotiated at $550/mt CFR Izmir, while other sources said that a part of the volume has finally changed hands at $535/mt CFR Turkey, which is around $495-500/mt FOB.
As SteelOrbis reported earlier, one deal for a small lot from this total volume has been redirected to Tunisia at $565/mt CFR, translating to around $510-520/mt FOB.
Due to the further scrap price declines and the still bearish outlook, bids from some Turkish customers have already been voiced at $500/mt CFR, but “it’s not a level even to talk about,” one seller source said. Also, a rumour about a sale at $490/mt CFR Izmir has emerged in the market, which has also been denied and seems to be part of the downside speculation, according to market sources.
The SteelOrbis reference price for ex-Russia billet has been corrected down further, to $500-515/mt FOB Black Sea, with the midpoint at $507.5/mt FOB, down by $7.5/mt on average from yesterday, June 22.
Being under pressure from lower-priced Russian material, Turkish billet producers have actually been somewhat confused regarding what to offer. “Going along with Russia is crazy and far lower than Turkey’s production cost. Not many are offering now in Turkey as they simply have no clue what to do. There are no deals, hence there is no level,” a trader told SteelOrbis. “Some local buyers report they received $550/mt ex-works, some say mills don’t want to go below $600/mt ex-works,” another source said. In the export segment, the number of ex-Turkey billet offers is also minimal. The main reason is that it is impossible to compete with Russia in the North African region. However, Turkey may have a chance to sell to Latin America since one of the customers there has recently made an inquiry. “Russia cannot sell over these since even Dubai and Singapore are controlling payments coming from South America,” a source said.