This week CIS billet export offers are in the price range of $490-505/mt FOB Black Sea for late June shipments. Offer levels from big producers are at $500/mt FOB while small producers' offer levels are at $490-500/mt FOB. The latest billet sales were at around $490-500/mt FOB.
Turkish billet prices have recently declined to $510-520/mt in the domestic market and to $500/mt FOB for exports. The conclusion of one cargo sale has even been reported at below $500/mt FOB to the Middle East. However, domestic billet has started to jazz up again due to the activity experienced in the Turkish deformed rebar market at the beginning of this week. First of all, Turkish mill Kardemir closed its sales after selling at $512/mt. Secondly, Turkish mill Isdemir concluded 70,000 tons of billet sales at $545/mt level and has already completed its July shipment billet sales. Following this situation, it became difficult for Turkish rolling mills to find prices at $510-520/mt at EAF mills. Export offers have risen to $520/mt FOB.
Billet prices in the local Italian market are currently at around €400/mt ($539/mt) delivered to warehouse in northern Italy on open account basis, excluding VAT. The Italian billet market is not in a very strong position, in parallel with the long prices situation. Furthermore, CIS billet offers at $535-540/mt CFR for Italy are not accepted in the market.
The billet market had been indicating a negative trend until this week. However, market players currently have positive expectations after the Chinese government's decision to increase the billet export tax to 15 percent. Despite the favorable expectations, there has not yet been any positive improvement in prices in the CIS and Europe. The increase in the Turkish billet market depends on the upward correction recorded in the Turkish domestic market, and not on the Chinese announcement. However, SteelOrbis has heard that Turkish and CIS producers are receiving demand again from their old customers in the Far East, mainly due to the uncertainty regarding Chinese billet. For the time being, it seems difficult to conclude possible sales to Far East from Turkey and the Black Sea. However, this situation may provide an indication as to the billet market's future.