Steel billet suppliers to the Turkish market, particularly those from Russia, have found themselves once again under pressure, following a short period of higher indicative offers. The scrap price decrease, although had been anticipated by many, turned out to be a quicker and sharper one as per the most recent deals, thus bringing the general market mood and expectations downwards. As a result, bids for import billet have declined and some buyers managed to fix deals at a discounted billet price.
Import billet price levels are currently reported at $570-590/mt CFR in both deals and offers, while earlier this week suppliers were thinking to offer at $600/mt CFR and above and buyers’ bids, though rare, were at $580-590/mt CFR. Lower scrap prices, fixed first in a deal from Europe and then from the US, became a game changer, making buyers step back from initial bids to $570-575/mt CFR levels. As a result, according to sources, some 2,000-3,000 mt lots were sold at $565-575/mt CFR, although the information has not been confirmed by the time of publication. Some sellers evaluate such levels as “unnecessarily low for the time being” and are aiming to get higher levels in the coming deals. Contrary to the information about the low-priced deals, sales of 3,000 mt lots have also been reported at $590/mt CFR, done by traders.
Along with Russian and Belarus origin billet offered and sold in Turkey, buyers also reported ex-Indonesia offers at $600/mt CFR, with a deal for this origin at $590/mt CFR, and a further increase of the indication to $620/mt CFR. “If someone booked from Indonesia it should have been a part of a vessel heading to Europe, around 10,000-15,000 mt. One should be crazy to buy over 20,000-30,000 mt at this price today,” a trader told SteelOrbis. In addition, traders’ offers for Kuwaiti billets have been also reported in the market at $590-595/mt CFR.
SteelOrbis’ reference price for ex-Russia billet has been lowered to $520-530/mt FOB Black Sea, down by $20/mt from the previous $540-550/mt FOB. Suppliers, who had been pushing offers to the high level seen from last Friday, have been forced to cut prices to more reasonable levels, seeing negative movements in the scrap segment and demand, especially from Turkey, which is not as good as had been expected.
Two deals for small volumes of 3,000 mt each for ex-Belarus billet to Turkey at $570/mt CFR translate to hardly above $520-525/mt FOB. Offers for ex-Russia billet have remained limited and suppliers have been planning to return with higher prices at $600/mt CFR Turkey or higher, but the current tradable level in the country has made this impossible. “I believe that offers from the CIS should be below $600/mt CFR,” a trader said.
Also, there has been information about a sale of ex-CIS billet to Egypt at $575/mt CFR last week, which translates to about $525/mt FOB, but this could not be confirmed by the time of publication. Though there were rumours that ex-Russia suppliers hiked offers to $590/mt CFR, this level has been assessed as unworkable in Egypt due to the continuous currency shortage and overall poor demand.