Import billet prices have increased in Turkey, following the inching up of scrap prices and the positivity in China, while only a few buyers have taken any serious action towards purchases. Most customers prefer to wait for the anticipated announcements by the Chinese governments, also considering that billet from Asia is mostly available with long lead times. In fact, suppliers, also, are not in a rush to push sales since they have time to observe the market conditions.
Currently, ex-China billet offers are closer to $485/mt CFR, versus $475-478/mt CFR a week earlier. In addition, there has been an indication from one of the traders at $473/mt CFR, sources reported, but it is considered to be shorting the market. Indonesia is at the same $485/mt CFR level as China, while Malaysia is at $490/mt CFR, up slightly from last week. “If we think of scrap at $360-365/mt CFR, then billet should be quite workable at $470-475/mt CFR. But the thing is that ahead of the awaited Chinese announcement, not many are eager to be active at present on either side,” a market player commented.
The SteelOrbis reference price for ex-Russia billet has remained stable at $435-440/mt FOB Black Sea as sellers have mainly been staying out of the market. There has been a rumor about 25,000 mt of Russian billet at $455/mt CFR, but this information has been widely denied by market sources. “This price is one of their old sales (done three to four weeks ago for April cargoes). The mill is not in the market for now,” a Turkish source said.
“We believe that the highest possible price now is $440/mt FOB, but the market is on pause due to the exchange rate,” a Russian mill said. The ruble has continued to appreciate this week, though at a slower pace, making exports less attractive. Today, February 26, the exchange rate has come to $1= RUB 86.3, versus $1= RUB 89.8 a week ago and $1 = RUB 94 two weeks ago.
“Everyone is waiting for Kardemir to release new [local billet] prices, which will either support [Russian] sellers or lead to a further halt,” another source said.
Turkish integrated steel producer Kardemir is expected to announce its offers either on February 27 or next Tuesday, and its price will largely define the bids for import material in the Karabuk area. “As per the market conditions, there should be no drop from the earlier sales price of $490/mt by Kardemir, but strategically they can drop the level in order to push Russian and Donbass cargoes out of the market somewhat,” a trader told SteelOrbis. In the other regions of Turkey, particularly in the Izmir and Iskenderun regions, local billet prices are standing at $515-525/mt ex-works, sources say.
