Number of billet offers from Russia to Turkey scarce, workable prices fall

Tuesday, 02 August 2022 17:54:24 (GMT+3)   |   Istanbul
       

As Turkey has been the main and almost only sales destination for Russian billet sellers, they have been closely watching the situation there. A number of mills, who see the current prices below breakeven, have been staying out of the market and not providing offers. In the meantime, Turkey has showed some movement in both local and import steel billet segments.

Today, August 2, Turkish integrated Kardemir announced $570-575/mt ex-works billet prices depending on the grade, while the supplier’s offers were at $630-635/mt ex-works a week ago. The key reason for the decline is the negative sentiment in the scrap segment and the price drop in the rebar market. The local rebar prices in Turkey are at around $600-630/mt ex-works and the last week’s sales for big volumes were closed at $585-590/mt ex-works at the lowest. Although the current price for Kardemir billet is not so far away from the rebar workable levels, domestic customers booked 26,000 mt of billet from the supplier today, sources report. The main reason is that there is a persisting lack of offers in both domestic and import segments.

Indeed, according to buyers and traders, most suppliers of Russian origin billet are now out of the market since they either do not have a cargo in hand or are not willing to sell close to or below costs. In addition, some suppliers report the freights from Russian ports for local vessels increased to $45-50/mt for medium lots from Novorossiysk and up to $75/mt for 3,000 mt lots from Rostov. “Russian vessel owners think they will also be able to go to Odessa and are waiting, and there are almost no [freight] offers at the moment,” a trader said. According to sources, at least 3,000-5,000 mt were sold from Russia at around $550/mt CFR with estimated freight of up to $40/mt to the Izmir region. The level is considered as “a good one for the seller” and many believe that next week it will be hard to achieve. Other market information states that 40,000 mt were sold by a Russian mill at $523/mt CFR. Although this has not been confirmed by the time of publication, most sources agree that such levels should be workable for large lots. Taking into account that only one or two suppliers are there to offer to Turkey, the general price range is not solid, but sources agree that $520-525/mt CFR levels “are aggressive, but not out of this world.”

The SteelOrbis reference price for ex-Russia billet has dropped again - to $495-510/mt FOB Black Sea with the midpoint at $502.5/mt FOB, down by $12.5/mt today. “I believe for the customers in Turkey $525-530/mt CFR may work [from Russia], but I don’t see many offers,” a source said. This CFR price translates to $495/mt FOB for large lots of 20-30,000 mt and $490/mt FOB or somewhat below to smaller lots.

“There are very few offers outside Turkey [from Russian sellers]. The market is very silent,” a trader said. As SteelOrbis reported last week, the firm offer to Egypt were at $570/mt CFR at the lowest last week, translating to $520/mt FOB at the highest, while the tradable level was hardly even at $560/mt CFR, taking into account high unsold stocks in the country.


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