Turkey’s import billet market has been seeing slightly higher buying activity which, however, seems to have come to a halt with the recent price drop in the import scrap segment. Moreover, while the Turkish market is in a downturn and buyers’ sentiments are rather negative, China has, on the contrary, been giving some positive signs and has slightly raised indicative offers. As a result, following several deals reported from Malaysia and Ukraine, billet imports in large lots, especially from China and Indonesia, do not seem a suitable option for Turkish mills at the present time.
With import scrap prices currently at around $345/mt CFR for HMS I/II (80:20) on average, captive billet production costs for Turkish mills are evaluated at around $500/mt, which means importers’ pressure on import billet price levels is set to increase. However, ex-China billet is now indicated at $495-500/mt CFR, up from $485-490/mt CFR earlier this week, while a Malaysian cargo, according to a few traders, is available at $515-520/mt CFR for January shipments. According to sources, early last week a 45,000-50,000 mt deal was closed from Malaysia at $513/mt CFR for 150 mm billet, while at the end of the same week a mill in northern Turkey booked another cargo of 165 mm billet of the same origin at $513/mt CFR. Moreover, the most recent deals for at least one cargo from Malaysia have been reported at $505-509/mt CFR, SteelOrbis is informed. “Now it seems that, with most billet for delivery in early March [to be shipped from Asia], scrap is a better option for Turkish mills. Another issue is that the rebar sales are very poor both domestically and for export,” a trader said.
Prices for ex-Russia billet have slipped this week, impacted not only by the weakening of bids from Turkey, but also by the depreciation of the local currency. In particular, the rouble-US dollar exchange rate has been stable above US$1 = RUB 100, while in late October it fluctuated at US$1 = RUB 95-97. The latest offers from major Russian suppliers have been at $475-485/mt CFR, down from $480-490/mt CFR reported last week. At the same time, the tradable level has been assessed at not above $470-475/mt CFR for Russian billet and some bids have already fallen to $455-460/mt CFR.
In addition, given the drop in scrap prices in Turkey and lower bids from this destination, Russian suppliers have been trying to evaluate other markets. “After deals at $510/mt CFR, the next ones will definitely be $5-10/mt lower. Moreover, these are all for high manganese billet grades with extras,” a trader said. Some other sources have also confirmed active negotiations and sales for Russian billet at $500/mt CFR Egypt.
The SteelOrbis reference price for ex-Russia billet has been assessed at $450-455/mt FOB Black Sea, moving down by $7.5/mt on average since late last week.
In the domestic market of Turkey, the prices have naturally slid following the lower import scrap prices, even though there is a certain shortage of supply in some regions. While last week the mills, except Kardemir, were offering at around $550-570/mt ex-works, the most recent prices in the Marmara region have been reported at $545/mt CPT and in the Izmir region at $530-540/mt ex-works for small lots. In the Iskenderun region, according to some sources, the realistic level is at $545-555/mt ex-works, although slightly higher offers have also been heard to be available. Kardemir is expected to announce its new billet price for local buyers next week and the anticipated level will not be above $505/mt ex-works for S235JR grade, sources assume.