Some softening was observed in ex-CIS billet offers over the course of the past week, with most offers at a price level of $515-520/mt FOB Black Sea. Sales to Southeast Asia meant that the CIS offers from the Black Sea only decreased slightly. However, there is no great demand at the mentioned level since the longs market in the Mediterranean in particular has not been doing well.
Domestic billet prices in the Turkish market decreased to $520/mt ex-works, excluding VAT, during the past week. However, there has not been serious demand in the local market for these levels as rebar prices are fairly low. Some rolling mills have started to slow down their production, or even make ad hoc stops, because of the low margins available.
On the export side, billet export offers ex-Turkey were in a price range of $515-520/mt FOB. In order to ease the tightening rebar export situation and due to the billet market's relatively stronger position, producers have been trying to put the emphasis on billet exports.
Billet prices for rebar production in the local Italian market are currently at around €390/mt ($553/mt) delivered to rolling mill, on 60-day open account basis, excluding VAT. Despite the high €/$ exchange rate, the Turkish and CIS billet offers at the price level of $540-550/mt CFR are currently not competitive compared to the local billet price levels. A sales level of €390/mt ($553/mt) had been seen in early September from Germany to northern Italy, delivered to rolling mill. The Italian buyers, aware of the negative situation in Germany's domestic market, have been trying to up the pressure in order to conclude deals at the price level of €375-380/mt ($532-539/mt), delivered to rolling mill.
Some softening movement, following the same trend in the longs markets, has been seen in the Mediterranean and Black Sea billet markets. However, the billet market is in a relatively stronger position compared to its longs counterpart. The result is that the rolling mills are experiencing major difficulties in maintaining decent profit margins.