Scrap offer and booking price levels have been on the rise since last week, leading the Turkish billet market to follow the same trend and try to move upwards.
CIS producers are unwilling to offer any billets at below the range of $415-420/mt FOB; however, Turkish buyers' current price idea for bookings from this region definitely falls below this range. Buyers in the Far East are also seen to prefer to delay any bookings at a time when billet prices are seeking to move in an upward direction.
Billet offers made to Turkey from the CIS this week have been in the range of $430-455/mt CFR, without much demand observed. On December 9, local Turkish producer Kardemir announced its new billet sales price level in the domestic market at $432-435/mt ex-works, excluding VAT. Price levels in the Turkish domestic market for billets vary according to region, and are currently not meeting with major demand from the rebar producers and rolling mills which produce for the domestic market. The continuing weak demand for long products, on top of the rising billet prices caused by higher raw material costs, are putting pressure on the rolling mills. Export offers by Turkish billet producers in the meantime stand at $435-440/mt FOB.
In short, in the current situation producers are finding it difficult to reflect rising raw material and billet costs on to their final products, for which demand remains low. At this stage, it is important to see how long buyers will suspend their purchases and at which levels actual transactions will start taking place. The market is hoping to gain clarity on these points prior to the New Year holidays.