Following a relatively silent last week in terms of billet sales to Turkey, a few new deals have been reported as having been done these days for ex-Russia and ex-Donbass billet with the CFR levels being relatively stable. Though Russian mills have been targeting higher levels from early this week on FOB basis, they have failed to get them. At the same time, downside pressure from Turkish and North African buyers was not successful either.
One sale of a limited volume of ex-Black Sea billet has been reported at $500/mt CFR Karabuk, while another deal for 3,000 mt has been done to an Iskenderun-based mill at $515/mt CFR, SteelOrbis learned from the market. “$500/mt CFR is right, but for very small volumes like 3,000-6,000 mt,” a trader said. Both deals are for October shipment versus previous small sales at $495-510/mt CFR done at least 10 days ago. The deal to Iskenderun has been reported as a sale from Rostov in the Azov Sea, from where freight rates are much higher than from the Black Sea. Some sources indicate freight from Rostov at $65-70/mt at the lowest now.
One Turkish mills said that today there has been an offer for ex-Black Sea billet from a trader at $495/mt CFR Karabuk, but it decided to postpone purchases, having enough stocks.
“In general, it is unclear how to break the deadlock in the Turkish market [with scrap, billet and finished steel sales imbalance] and there are rival countries with cheaper products even though the scrap/iron ore ratio is three to one,” a trader said.
In general, Russian billet suppliers have been resisting any decrease in prices and were even targeting higher levels of $490-495/mt FOB early in the week. Nevertheless, the lack of any big movement in scrap prices and mixed expectations have made them roll back offers to $480/mt FOB Black Sea. For new orders, this FOB price translates to $520-525/mt CFR Iskenderun and $510/mt CFR Karabuk. “Mills from the Russian Federation do not see the downward correction in prices and are saying “no export, no problem”. They enjoy a strong domestic market,” another trader said.
Nevertheless, the SteelOrbis reference price for ex-Black Sea billet has been lowered to $470/mt FOB from $470-480/mt FOB seen since late last week. High freight rates, no new sales in the Egyptian market, and the resistance of Turkish buyers have been behind the correction.
Aside from offers and deals for the toxic Russian and ex-Donbass billet origins, there is some interest in clean origins as well. A Ukrainian producer has recently sold up to 15,000 mt of billet to Turkey at around $520-525/mt CFR. The previous deal was closed several weeks ago at $500/mt CFR. In addition, there are offers for billet from Malaysia at around $535/mt CFR and from Indonesia at $540-545/mt CFR, but both levels are considered unworkable at the moment.
The domestic prices for billet in Turkey have remained relatively stable over the past week. The producers’ targets in the Iskenderun region have been reported at $535-545/mt ex-works. However, the latest deals, according to sources, have been closed at $525/mt ex-works, though with a large prepayment. Currently, some sources believe similar levels may also be achievable again with the prepayment option. In the Izmir and Marmara regions, offer prices are at $540/mt ex-works and $545/mt CPT, respectively. In addition, Kardemir is expected to announce new billet sales early next week and the anticipated price is around $530-535/mt ex-works.