Billet prices have moved up considerably in the Turkish market this week, fueled by a rapid uptrend in the domestic rebar market. Although the demand for rebar is still more on the cautious side, most market players believe that the upturn is justified based on increasing energy costs and the chaotic situation in the global freight market. The solid pricing for the import scrap is another key reason for mills to increase prices for rebar.
In fact, currently the scrap market is evaluated at $390/mt CFR and the level is believed to have gained acceptance, and so captive billet production costs would be at around $545-550/mt ex-works for April-May production. The domestic rebar prices increased in two steps by around $30/mt from the pre-holiday levels and are now at $580-605/mt ex-works depending on the region. “It is critical to see how much they can sell at the new levels. There are still fears that if things [situation in the GCC] are settled, prices will roll back to normal levels. Then what one will do stuck with rebar stock at $600/mt or above?” a market source said. Generally, some buying is expected according to daily needs, but many would avoid building up excessive stocks, market players believe.
Higher rebar prices have triggered the price rise for local billet - from $510-520/mt ex-works before the holiday to $530-540/mt ex-works minimum now. Some mills might try $550-555/mt ex-works/CPT levels quite soon, SteelOrbis understands.
Import billet pricing, unlike the usual situation, is currently based mainly on the situation with freight rates, which, according to various sources, have in some cases added another $3-5/mt over the past week. “Today everyone is rather following the FOB levels and prefers to evaluate freight on formula basis, since CFR prices are changing too much depending on whether the supply side is optimistic about the situation or pessimistic,” a market source told SteelOrbis. Some market players have reported that a few billet cargoes destined for Turkey have been delayed for one to two weeks, due to the high freight rates, but also due to shifting queues in vessel availability based on the situation in the Persian Gulf.
Billet indications from China have been reported this week at $520-530/mt CFR for May shipments, up by around $5/mt over the past week. An ex-Malaysia billet lot of 10,000 mt for May shipment, according to sources, has been on offer at $530-535/mt CFR, with no takers yet. Indonesia is offering at $485/mt FOB for June shipment, which is around $535-540/mt CFR Turkey. Ukraine’s billet price for May shipment is at $530/mt CFR.
The lowest import billet offers have been from Russia. Some suppliers have been offering at $480-485/mt CFR since late last week, but now at least one offer is as high as $490-495/mt CFR. “I believe everybody is waiting for scrap to settle before booking billet. The market for billet is rather quiet,” a trader said. The SteelOrbis reference price has increased by $7.5/mt over the past week to $455/mt FOB Black Sea. “I think the market will reach $460/mt FOB very soon,” a trading source said.
