Turkey’s billet market has seen a minimum of trading activity this week, but prices, particularly in the import segment, have slid down. Ex-Asia suppliers, including China, have come with rather aggressive offers, putting pressure on the pricing from Russia and Donbass. In the meantime, local buyers in Turkey, including most steel producers, are not willing to book import billet at the current levels and are either staying away from active negotiations or are bidding at low levels. As a result, import billet deals have been only sporadic.
In fact, there has been a sale of up to 15,000 mt of square billet from Ukraine in the range of $545-550/mt CFR, which is considered a good level for a supplier. “It is a clean origin and for a fairly acceptable lead time,” a source commented. The offers from India and Indonesia are at $540/mt and $540-545/mt CFR this week, while Malaysia is at $552-555/mt CFR, down from $560-565/mt CFR seen earlier. Overall, most Turkish steel producers are not eager to import at the mentioned levels, given that their own cost of billet production from scrap is estimated at around $170/mt, i.e., translating to around $545/mt.
China has been rather aggressive this week with offers falling first by $10/mt to $540-550/mt CFR with further drop to around $525-540/mt CFR levels. The lower end of the range is considered to be achievable from traders who are going short. “Hardly anyone is going to buy from China now, it is too risky, the lead time is long and if there is a chance to push duty-free Malaysian material to $540/mt CFR levels, there is no point in buying from China,” a steel mill told SteelOrbis. Over the past week, the general range of realistic import offers for non-toxic billet origins in Turkey has dropped by $15/mt to $535-550/mt CFR.
In this situation, almost zero activity has been seen from Russian and Donbas billet suppliers in Turkey. firm offers are hardly available while the indications are estimated at around $550-555/mt CFR, versus $530-535/mt CFR price idea from the rare buyers.
The SteelOrbis daily reference price for ex-Russia billet has been lowered by $5/mt to $515-520/mt FOB Black Sea as, even though most suppliers from Russia and Donbass have still been asking for $520-525/mt FOB at the lowest, the tradable level is already lower, according to a number of market sources. “If we consider buyers’ price ideas for slabs at $500/mt CFR and below [in Turkey], for billet the price of $545-550/mt CFR is very good,” a Turkish trader said, adding that for Russian mills it would be a great opportunity to sell at close to this level. The tradable level for ex-Russia billet in Turkey has been assessed at $540/mt CFR at the highest for July shipment material, translating to $510-515/mt FOB.
Offers for ex-Russia billet to Egypt have been reported at $560/mt CFR, while bids were at only $545-550/mt CFR as reported early this week. Uncertainty due to the second round of elections in Turkey and downward pressure coming from China have been keeping buyers from North Africa away from purchases.
In the Turkish domestic market, business activity has barely been seen. In the Iskenderun region, around 5,000 mt of billet have been traded at $600/mt ex-works, which is considered to be a high level for now. In the Marmara region, the indications of earlier this week stood at $615-620/mt ex-works, while no relevant price idea has been reported for the Izmir region. Generally, buyers believe the local billet price should be at $580-590/mt ex-works maximum as of today, given the import offers and the slow sales in the longs segment.