The eyes of Turkish buyers remain focused on billet supplies with short lead times, which means local and Black Sea origins, while the interest in Asian billet is largely non-existent. The importers are trying to evaluate the sustainability of the current uptrend in billet prices, triggered by China earlier this week. Despite a certain increase in rebar prices and some panic buying, seen mainly in the local market, the overall demand and outlook for Turkish longs seems rather dull. “It is not the right time for higher ex-China prices to be supported here in our region. Demand everywhere is low seasonally. In September, there could be a chance but not now, it [higher billet price from China] will not fly,” a Turkish source told SteelOrbis.
Another issue is that deep sea import scrap prices in Turkey remain relatively stable at $340.5-347/mt CFR for HMS I/II (80:20), also not supporting the Chinese uptrend. Turkey’s domestic EAF-based billet production costs are estimated today at $500-505/mt, while the import billet of non-toxic origins is available at $485-510/mt CFR depending in the supplier. In the local market, billet inched up to $500-510/mt ex-works from $490-505/mt ex-works seen earlier, with the latest deals from Kardemir at $500/mt and $510/mt ex-works, depending on the grade, for up to 75,000 mt as of July 24.
The latest realistic billet price indications from China are now at $490-495/mt CFR, up from $465-469/mt CFR last week, mostly for September shipments. Some of the offers have been reported at $500/mt CFR, being clearly not of any interest. “Currently, there is no such thing as a workable price. No one would buy even at $470-475/mt CFR. The market is too unstable,” a Turkish buyer said.
Other Asian offers are indicative this week since the suppliers realize there will hardly be any serious negotiations with Turkey at present. Indonesia is at $450/mt FOB which translates to $486-488/mt CFR, according to SteelOrbis’ evaluations. No firm offers from Malaysia have been heard in the market, but traders estimate the indications should be at $500-505/mt CFR for September shipments and no interest is expected at that level.
Ukraine’s billet is on offer at quite high levels, and it seems the suppliers are not in much rush to sell now for September shipments. One of the mills is offering at $500/mt CFR, down from $515-520/mt CFR around 10 days ago. Another producer is at $510/mt CFR, up from $490/mt CFR last week. The latest deal for August shipment ex-Ukraine was closed at $480/mt CFR.
The SteelOrbis reference price for ex-Russia billet has been stable since early this week at $440-450/mt FOB, which is up by $11.5/mt over the past week. There have been a limited number of offers from Russia since, after a sharp rise in Asian billet prices, most other sellers have been assessing the market situation. On one side, Russian suppliers had a lead time advantage as arrivals can be had by the end of August, and the price level is among the most competitive. But on the other side, buyers, especially in the Black Sea area, have already restocked with local billet and are rather cautious. The latest firm bids have been at $455/mt CFR for ex-Russia billets, only slightly above the previous deals reported at $450-455/mt CFR. But rare offers have been from $465/mt CFR and above (translating to $440-445/mt FOB and higher). So, the tradable level has been assessed by some buyers at $460/mt CFR, though some market sources believe that $465-470/mt CFR may also be accepted for limited volumes with short lead times, especially if the uptrend in the global market persists.