The billet market in Turkey has remained silent this week, due to the influence of low rebar prices, sharp currency fluctuations, and rising uncertainties and negative sentiment in the shipping freight segment. In the meantime, bids have remained rare, while both import and local price indications for billet have slid.
According to sources, billet offers in the Iskenderun region of Turkey have decreased by around $15/mt over the past week to $580/mt ex-works with no takers. Similar or $5-10/mt higher levels are heard for other regions in Turkey. The low rebar prices in the country, which have dropped to around $600/mt ex-works in sales in the Izmir region specifically, remain the key restraining factor for the billet trade in the country. Several import offers have been heard from traders at $585/mt CFR, while mills’ prices have been heard at $590-597/mt CFR depending on the region. Some sources estimate that Turkey will be ready to pay $575-580/mt CFR at the highest. Last week, the indicative offer levels were reported at $590-595/mt FOB for billet of the main suppliers.
Turkey’s low interest in billet imports and subdued rebar segment are considered to be among the key factors restraining the CIS-based billet mills from increasing their prices, even though there is some cautious optimism in the import scrap segment in Turkey. CIS-based billet producers have been offering at $570-575/mt FOB mainly. Some suppliers have been ready to provide discounts of up to $5/mt, but this has not provided any visible support to trading activity. Overall prices have posted some slight $5-10/mt decreases in offers compared to last week. Nevertheless, “the market remained unmoved by the recent fall of the lira and the uncertainty in scrap,” a trader said. Apart from the weak demand from Turkey, other outlets have also been quiet.
Last week, a deal for a large cargo of billet from eastern Ukraine was rumored to have been sold at $590/mt CFR to Saudi Arabia, corresponding to below $550/mt FOB. But this could not be confirmed by market sources and is not considered to be the market level.
Some CIS-based billet producers are still optimistic for the market in the coming few weeks, provided that the situation in the scrap and rebar market improves.
The positive moods have prevailed in the Asian billet market, where the latest deals for billet from Russia’s Far East region have been done at $605-610/mt CFR this week. But taking into account the already increased freight costs and the transportation issue due to the Suez Canal situation, Asia is not considered to be a possible sales destination for Black Sea region-based billet exporters in the near future.
The SteelOrbis reference price for ex-CIS billet has been lowered slightly to $565/mt FOB, down by $2.5/mt from the level earlier this week and down $6/mt over the past week.