This week, there has been a clear price downtrend in the import billet segment of Turkey, largely triggered by the fall in deep sea scrap transaction levels. In addition, finished steel demand has not been supportive enough to improve the general market mood. However, the price range for import billet has been wide this week, depending on the sellers, their market position, the cargo size, and the lead time. In the meantime, the freight rates in the region have weakened somewhat, thus giving suppliers a bit more room for their margin. At the same time, there is a lot of talk in the market regarding the tough financial situation of Russian billet suppliers and the reduced allocation from Ukraine’s Donbass region, which might affect the general billet availability in Turkey in the medium-term.
Early this week, the offers and indications for ex-Russia billet in Turkey have been reported at $570-580/mt CFR from certain suppliers and around 20,000 mt were sold by one of them in 3,000 mt lots at $575-577/mt CFR to the Izmir region and to the Black Sea side. Many players in the market have doubts that the workable price could be that high, especially given that larger volumes were available at significantly lower levels at that time. “This [price] is on the higher side, especially for 6 m and 125 mm billet, while others could not even get $550-560/mt CFR,” a trader told SteelOrbis. By the middle of the week, some buyers in Izmir have reported $560/mt CFR offers for 5,000 mt, while 20,000-30,000 mt cargoes, according to sources, have been on offer at $540-550/mt CFR to the Marmara and Izmir regions. “Many believe scrap will fall further, so even this [billet price] is not workable for them, at least today,” a source mentioned. At the end of last week, the ex-Russia billet import level in Turkey was at $565-580/mt CFR.
In the domestic market in Turkey, the number of billet offers is still scarce. Today, September 14, Kardemir announced billet sales at $610-615/mt ex-works depending on the steel grade. Such a level was widely expected in the market but it did not become workable due to the pessimistic moods among buyers. In the Marmara region, one offer was voiced at $630/mt delivered, and similar levels are expected in the Izmir region. The suppliers in the Iskenderun region are said to be inactive at the moment and the indicative prices are reported at around $620-630/mt ex-works.
The SteelOrbis reference price for ex-Russia billet has declined by $12.5/mt to $505-520/mt FOB with the midpoint at $512.5/mt FOB, versus the previous levels of $520-530/mt FOB Black Sea. Though the decline in CFR prices has been bigger, the FOB level has been corrected at a slower pace, taking into account some reduction in freight rates, which have eased to an average of $35/mt to Turkey, versus the previous $40/mt. In general, the number of offers from Russian mills and traders are still limited.