Business activity in Turkey’s square billet market has been stalled this week, impacted by several factors. One factor is that CIS-based mills, who had already achieved $650/mt FOB in sales to alternative destinations, have been insisting on higher levels to Turkey as well. As a result, import offers are not considered attractive and the number of bids is generally low. However, the domestic billet trade has also been subdued, partly due to the rebar production cuts across the country due to the energy supply issue.
This week, a majority of import billet offers from the CIS have been set at $675-690/mt CFR from some mills and traders, up by $5-10/mt over the past week. Some bids were at $650/mt CFR Izmir, but were not accepted by the seller. Some sources expect falling freight rates to help the billet trade to Turkey in the coming period, though no huge trade in terms of volume is expected for now.
The number of domestic billet offers has been scarce and prices are mostly at $670-680/mt ex-works, which is not workable for most buyers. One reason is that rebar is available at only $30/mt above billet offers, which puts margins under pressure. In addition, market sources have been trying to estimate the consequences of the ongoing production cuts on the rebar rolling side.
According to sources, some of the mills have decided to stop or to significantly slow down their rebar rolling amid the power cuts, which may have resulted in an output reduction as high as 20-25 percent across the country as compared to last week’s levels, which were already at around 70 percent capacity utilization due to low demand. “Now lots of mills are using this time to carry out delayed maintenance works. The main impact is on re-rollers, service centres and end-production facilities,” a trader told SteelOrbis.