The billet market in Turkey, despite some rebound seen in ex-Asia prices, has remained weak. One reason is the large volume booked earlier, while another is the falling deep sea scrap price which is now at $355-360/mt CFR according to the latest deals. Given the conversion cost of around $150-160/mt from scrap to billet in captive production, in theory the import price of $490-500/mt CFR should be workable in Turkey. “Billet is not an exact substitute for scrap since for the domestic market you need scrap. So, this is why they are forced to pay better for scrap, if need be,” a trading source told SteelOrbis.
While buyers are hesitating to accept the current offers from Asia, the suppliers from the Black Sea, ex-Russia and ex-Donbass, have stepped in, aiming to take advantage of their shorter lead time.
The SteelOrbis reference price for ex-Russia billet has fallen to $450-460/mt FOB Black Sea with the midpoint at $455/mt FOB, sharply down by $15/mt from the previous level. This drop is due to the need of some sellers to push volumes after relatively silent weeks and low bids. At the same time, some mills do not want to support this downtrend and have taken a pause from offering.
A sale from one of the major Russian mills to Turkey has been heard at $480/mt CFR, as heard from traders and some Turkish buyers, translating to $455-460/mt FOB. Another trade has been rumored at $490/mt CFR, but has not been confirmed by the time of publication. Also, an offer from Donbass, the Ukrainian territory occupied by Russia, stands at $465/mt CFR to Turkey. “This could be a deal level. They were staying at $480/mt CFR before without any sales,” a local source in Turkey said.
Ex-China prices have rebounded to $480-485/mt CFR for October shipment, up $10-15/mt over the past week. Billet prices from Indonesia and Malaysia have also inched up, by around $5/mt to $485-490/mt and $495-500/mt, respectively, both on CFR basis and for October shipments.
In the domestic market, Kardemir has announced billet sales at a stable price level of $535/mt ex-works for S235JR grade and $550/mt ex-works for B420 grade. Given all the discounts related to order size and payment, Kardemir’s price is estimated at $504.9/mt ex-works. So far, according to sources, the mill has sold around 35,000 mt of billet.
