While the
rebar and
wire rod market slowed down in October and early November, the strongest market seemed to be
billet. Furthermore, the export tax for Chinese origin
billet has been expected to support both Mediterranean and Black Sea
billet. However, the rapid decline and demand shortage in the
longs market seems to be putting pressure on the
billet market.
Billet prices in
Turkey's Iskenderun region have remained unchanged at over $450/mt. The Turkish mill Kardemir has reduced its prices to $435/mt. The prices in
Turkey's Izmir region are at $430/mt. For imports, prices are at $420-435/mt CFR Turkish ports depending on regions. However, the domestic market is not showing interest in these prices. The capacity utilization rate of rolling mills has increased significantly due to the strength of the long products market in 2006. In addition, rolling tonnages indicated an increase following new
investments. Therefore, this situation has caused a strong domestic
billet demand. Demand peaked especially in late August and September. Therefore, The Turkish mills are not giving offers for exports lately. However, export offers are beginning to be heard due to the rapid decline and demand shortage in the
longs market. Turkish mills prefer to conclude
billet sales to domestic and export markets instead of producing and storing
wire rod and
rebar. This is because the demand for long products is weak and the margin gap between
billet and long products has narrowed. In Turkish ports,
billet offers and sales for export are at $430/mt FOB and below.
The
CIS-origin
billet price has indicated a seasonal slowdown, but just a slight one.
CIS-origin billets are being offered at a minimum $402-403/mt FOB Black Sea, while some producers are offering at $415/mt FOB Black Sea.
CIS producers concluded
billet sales to
Italy and the
Middle East at $440-445/mt CFR last week. Furthermore,
billet offers have been made to
Egypt at $442-445/mt CFR this week. Although
billet sales were concluded at $410/mt FOB Black Sea and above last week, these levels may not be accepted this week due to the slowdown in
rebar prices in the Mediterranean. In addition, the fact that Turkish producers returned to the market may put pressure on
CIS producers.
Indian-origin
billet prices are still strong due to the rallying in the domestic market and the export tax on Chinese
billet. The export offers of Indian producers are at $410-425/mt FOB. With these levels, it seems that Indian-origin can not compete with the Turkish and
CIS origin billets in the
Middle East and Gulf regions.
Especially due to the difficulty in the
wire rod market, after the Turkish producers, a new player has joined the
billet market. Some producers in
Egypt have started to make
billet offers for export. With the support of the export tax on Chinese
billet, Egyptian-origin
billet offers are at $450/mt FOB this week. The prices appear to be not so competitive, but the significant case
Egypt –a net
billet importer - has started to make
billet offers for export. Currently, Egyptian mills are offering billets to
Syria and
Jordan, which have
freight advantage.
The
billet market is currently the centre of attention due to the rapid decline in long products prices. Turkish producers in particular, who cannot find their sought-after prices for long products, have focused on the
billet market as they can make easy sales at large tonnages.
Billet prices may slow down in the coming period in the Mediterranean and Black Sea regions due to the producers' intense interest.