Turkey’s billet market has shown some activity, but mainly in terms of local buying, while the import side has remained somewhat dull. The buyers are not quite confident to purchase large lots since scrap prices are set to move down further or at least will not rebound in the short run. In addition, Ramadan and the elections in Turkey are drawing closer, which makes a lot of players postpone their activities. As a result, there were a couple of small deals from Russia last week, while the number of offers of Russian and Donbass origin is now scarce. In the meantime, Asian prices, though softened over the past week, are still not workable for Turkey given Kardemir’s latest price.
Integrated Turkish producer Kardemir has announced billet sales at $565/mt ex-works, for S235JR grade only this time again, down by $15/mt from the level announced on February 15. The price is lower than initially expected in the market, as market sources had been expecting a $5-10/mt decline. As a result, the producer has managed to sell bigger volumes than the last time, which was a bit of the surprise for some players. By the time of publication, sales for around 42,500 mt of billets have been reported, versus slightly above 10,000 mt in total the last time. With this development, the local billet price in Turkey is now evaluated at $565-580/mt ex-works, $10-15/mt down. Last week, a small lot changed hands in the Izmir region at $585/mt ex-works.
The latest two deals for 3,000 mt of Russian billet each were signed to Turkey at $545/mt CFR Karabuk and $549/mt CFR Izmir last week, but the relatively high prices are still explained by short lead times, with shipments planned for the first half of March. As for April shipment and beyond, Turkish buyers will insist on $530/mt CFR for Russian origin, market sources said. However, the remaining prompt-shipment cargo from Russia is still on offer at $545/mt CFR to the Black Sea region of Turkey.
The SteelOrbis reference price for ex-Russia billet has remained at $510-517/mt FOB with the midpoint at $513.5/mt FOB Black Sea since, even though offers are stable and rare, buyers’ price ideas have been under constant pressure. “In general, the market sentiment is that we need to understand where scrap will settle first… I think it will be even below $400/mt CFR [in new deals],” a Turkish trader said.
Ex-Asia offers, namely, from Malaysia and Indonesia, have decreased by around $10/mt over the past week to $550-555/mt CFR from traders for April shipments, which is not considered workable just yet. “Scrap is weak and buyer-driven, and Asia will deliver billet in the best case at the end of May, so there is no rush now,” a market source told SteelOrbis.
