Business activity in Turkey’s billet market has as expected been quiet this week due to the ongoing holiday. Moreover, since import scrap prices have been rising, most billet sellers, local and Russian suppliers, have decided to take a step back in order to gain a clearer picture of the market next week. Still, some information about negotiations and deals has been circulating.
According to sources, around 6,000-7,000 mt of ex-Donbass billet was sold to a Turkish steel producer at $620/mt CFR. Most buyers evaluate this level as high for the current market conditions. However, some sources state that this specific mill could have paid the price. “They produce higher-margin sections, so it is safe for them to buy,” a merchant bar re-roller said, adding that the current workable prices for regular merchant bars are not yet high enough to accept billet prices above $600-605/mt CFR, at least for the smaller companies.
This week, the number of negotiations is minimal, but some sellers of ex-Russia cargoes are voicing a $650/mt CFR target. “For rebar and wire rod, it is ok. As long as the local market targets $700/mt minimum, import [billet] might shape up at around $650/mt CFR,” a supplier told SteelOrbis. Others believe that such high prices for ex-Russia billet are possible only if import scrap deal price levels move up further.
The SteelOrbis reference price for ex-Russia billet has remained at $560/mt FOB Black Sea for now, stable from last Friday. Even though this rumoured deal to Turkey at $620/mt CFR corresponds to $570-575/mt FOB Black Sea, this level has not been confirmed as widely workable in the market, so it has not been included in the reference price range, at least for now.
Another factor that may trigger demand for import billet is the scarcity of local offers. Some mills report they will not be offering until September due to maintenance, while others prefer not to sell in the current market conditions. The latest indications in the Iskenderun region were at $700/mt ex-works, while the latest Kardemir sales price was set at $670-675/mt ex-works.