Import billet prices in Turkey have softened over the past week, while the interest shown by buyers has improved somewhat. While previously it was mostly small buyers and those who preferred to buy small and medium-size lots from the Black Sea region who had been active, now according to sources there are several inquiries for 40,000-50,000 mt lots on the table from large mills. Market players assume that the lead times, which were previously unacceptably long, are now more attractive, following a couple of weeks of delayed demand. “There is interest [in billet imports], but for now the prices do not really match as the supplying mills are mostly hesitating. It seems that large Turkish producers would now prefer to have at least one billet shipment in 30-45 days in order to average out their costs and to have more control over import scrap prices,” one trader stated. Currently, captive billet production costs in Turkey are estimated at around $515-525/mt.
In particular, there is interest in billet from Malaysia, which is a duty-free origin and can be used for rebar production by Turkish customers. While the suppliers’ indications are currently evaluated at around $515/mt CFR, the most recent bids have been heard in the range of $500-510/mt CFR. In addition, there has been information about a cargo of up to 50,000 mt sold by a Malaysian mill to a trader for Turkey at $513/mt CFR. However, some market sources assume it is to cover a previous short position agreed with the buyer some time ago at around $10/mt higher. The cargo is for approximately mid-January shipment.
Over the past week, ex-China billet prices have dropped from $510-515/mt to $490-495/mt CFR, with the highest estimated workable price at around $480/mt CFR. No deals or active negotiations have been reported yet.
As for the Black Sea, Ukraine is expected to announce offers shortly, most probably trying to take advantage of its close geographical proximity to Turkey. Russian mills have not been so active, having sold some lots previously. While their nominal offers are estimated at $480-490/mt CFR, bids are still at $470-475/mt CFR maximum for sanctioned material. The SteelOrbis reference price for ex-Russia billet has been corrected down by $2.5/mt on average to $460/mt FOB, but most buyers are waiting for additional discounts given the downward trend seen from Asia.
In the domestic market in Turkey, some deals for medium-size tonnages have been reported in the Iskenderun region within the range of $560-570/mt ex-works, in line with last week’s offers.
