CIS billet prices were being given by mills at levels of $1,020-1,060/mt FOB Ukraine towards the end of this week, with some traders heard to be offering at even lower levels. This price range represents a decline, as traders with previously taken positions for CIS origin billet had started to give offers at lower levels than local mills' prices. However, despite the decline in offer levels, the main reason for the halt in the bookings of the Turkish rolling mills is uncertainty over the possible levels reached by long product prices in the foreign markets by the time booked billet supplies would arrive.
Turkish billet prices have dropped by around $60/mt in the past two weeks due to the softening in Turkey's domestic rebar prices, as well as due to the decline in Turkish mills' rebar export offers for destinations other than Dubai. As a result, this week's Turkish billet prices are standing in a range of $1,210-1,260/mt ex-works. Due to the brisk billet demand in Turkey's domestic market, local producers are allocating their billet production for their own finished steel making operations, thus giving no export offers for billet. In addition, due to the low-price billet offers made to Turkey and the Middle East from the CIS, China and India, possible billet offers from the Turkish mills would stand at very high levels. It is heard that that Turkish mills' price idea for billet exports is at $1,250-1,270/mt FOB Turkey for September/October shipments.
With Chinese billet export prices currently at $1,050/mt FOB, Chinese mills are having difficulty competing in the international markets due to the decrease in global billet prices. While domestic billet prices in the China are currently at $785/mt, the country's export prices for the same product have recently seen the level of $1,050/mt, given the 25 percent duty China imposes on billet exports. Chinese export prices for billet have now almost reached the same levels as those of CIS producers.