Even though they need to buy scrap in order to continue their production operations in August, billet producers in Turkey had been holding back from scrap purchases in recent weeks due to the strong levels of scrap prices and the low levels of finished steel prices. However, billet producers who do not want to halt production and whose stock levels are low have this week again started to buy scrap.
While finished steel prices (and accordingly semi-finished steel prices) had been decreasing under the influence of low end-user demand, prices for finished products have slowed their downward movement both last week and in the current week as scrap prices failed to register any softening trend. However, over the same period, ex-CIS billets (delivered at Black Sea ports) decreased to $380-400/mt FOB CIS. Also, in the same period, ex-Turkey billet offers for export declined to $380-400/mt FOB Turkey, while offers decreased to $405/mt ex-works excluding VAT in the local Turkish market. Turkish producers' latest announced billet price level of $405/mt ex-works excluding VAT been met by acceptance in the local market. Since the Turkish producers have again resumed scrap purchases, it is expected that an uptrend in local billet prices levels may be seen in the coming period.
Meanwhile, demand from the Far East for the CIS and Turkish billet prices still exists. Besides billet, demand from the Far East for scrap is the main reason why both scrap and billet prices are registering strong levels compared to the general situation in finished steel.