During the past week, domestic billet prices in Turkey have increased by an average of $5/mt to $450-460/mt ex-works. Meanwhile, market sources state that the rises seen in domestic billet prices have successfully gained acceptance from Turkish buyers who have been continuing their purchases of domestic billet.
It is observed that CIS-based billet suppliers have kept their billet offers to Turkey stable over the past week at $435-440/mt CFR. Turkish liquid steel producers still prefer import scrap instead of import billet due to the lower production costs involved and so they have been continuing their import scrap purchases. On the other hand, Turkish rolling mills, which usually import billet within the scope of Turkey’s inward processing regime (under this scheme mills have to give a commitment to export the finished products they produce from imported billet) to avoid taxes, are meeting their billet needs from their domestic market instead of importing billet as they have been receiving weak finished steel demand from their export markets for a while now. As a result, demand for ex-CIS billet in Turkey is at low levels.
Chinese billet prices in the international market have increased further by an average of $7.5/mt week on week to $470-480/mt FOB. The steady increases in Chinese suppliers’ billet quotations have exerted upward pressure on global billet prices, while demand for Chinese billet in the export markets has declined as overseas buyers consider the current ex-China price levels to be on the high side.