Billet prices in Turkey’s import market have surged after the sharp price rises in China and in Asia overall seen on Monday, September 30. In such conditions, most customers have taken a step back and are assessing the current situation and possible purchases of alternatives to Asian materials.
Offers for ex-China billet to Turkey have been voiced at $525/mt CFR, rising by $20-25 from last Thursday. Indonesian billet has been available mainly for January shipment and at $520/mt CFR, up by $30/mt from the reference level late last week. After a deal at $490/mt CFR for Malaysian billet, there have been no fresh offers reported by the time of publication.
The ex-Asia billet offers at $520-525/mt CFR are not considered workable in Turkey, despite the recent price increase in the rebar segment to around $620-630/mt in the domestic market and $590-600/mt CFR for exports. The reason is that the average captive billet production cost in Turkey is now at around $530-535/mt, and so import billet for the regular delivery term should be at least $20/mt lower than that. Overall, it is expected that Chinese billet may be workable at $500-510/mt CFR levels after the long holiday, which is still higher than the previous $485-490/mt CFR indications last week.
It is worth mentioning that, according to sources, three or four billet cargoes have been canceled from the previous deals closed to Turkey and reported by SteelOrbis. The information has not been confirmed by the time of publication, but market players believe this situation may indeed have been possible, although for one or two cargoes possibly. “The buyer can cancel if for example the seller violates she shipment term, which is possible with China’s recent port congestions. But for a trader to cancel the deal it is a matter of damaged reputation,” a source told SteelOrbis.
In the meantime, while China has announced a price surge and has left for its holiday, some of the Turkish buyers may be interested in restocking with alternative origins, particularly those from the Black Sea. In particular, it is believed that Ukraine may reach around $515-520/mt CFR if the acceptable lead time is available. However, the latest offers from one of the mills for December shipment have been voiced at around $540/mt CFR, SteelOrbis has heard.
Russian billet exporters have also been preparing for a price increase, though for now there has been a lack of firm offers. “There are more inquiries [from Turkey], but we are not offering and are waiting… Billet prices should reach $500/mt CFR in the next sales,” a Russian billet seller said. One offer has been heard from a Russian mill at $490/mt FOB, translating to $510/mt CFR and above, being too high. Most market sources agree that the tradable level for ex-Russia and ex-Donbass billet should be at $490-500/mt CFR in the next negotiations. The SteelOrbis reference price for ex-Russia billet stands at $470-475/mt FOB, up by $5/mt from the previous days and up $10/mt on average since late last week.
