Turkish billet buyers have been in the market to test prices following China’s post-holiday return. Moreover, some of them have found the prices from Malaysia quite attractive, especially since the offers have been received for cargoes with a rather short lead time.
Since last week, Turkish longs producers have booked a total of around 75,000-80,000 mt of billet from Malaysia at the average price of $485/mt CFR with some deals closed slightly below and above this level. Part of the volume, according to sources, is for end-of-March shipments, while some lots are for end of February-early March shipments. “It is the closest one can get in today‘s market if we are talking about large volumes. If local prices in Turkey improve in April and May, Malaysian billet might be used for domestic production,” a trader told SteelOrbis. The new offers ex-Malaysia to Turkey are at $485-487/mt CFR, mainly for shipment in the first half of April.
Less interest has been seen in prices from China and Indonesia this week, while both origins are on offer at around $473-475/mt CFR for April shipments. “Buying these [origins] carries more risk as it is for rebar or merchant bars to be produced at the end of May and even in June,” a source said. Import scrap prices in Turkey are expected to remain rather firm for April with some market players seeing some potential for a further modest uptrend. However, Turkey might face higher production costs since another upward adjustment of energy tariffs is expected around April.
Ukraine, according to market sources, has been indicating $510/mt CFR for April production, being not so aggressive for sales and checking the market. Turkish buyers assume the workable levels for this origin might be around $500/mt CFR.
The SteelOrbis reference price for ex-Russia Black Sea billet stands at $425-430/mt FOB, inching up by $2.5/mt on average from the level settled late last week. The small increase has been connected with the limited supply rather than an improvement in the overall market conditions. “I do not see any improvement in billet prices even though scrap is up. At the same time, exporters’ costs are on rise because of the stronger ruble. Mills do not know what to do. And the situation is worsening due to the paralysis of the railways,” a source said. Another trader said that they hope for a price improvement, but for now there have been no new deals after sales for ex-Donbas billet at $440/mt CFR and ex-Russia material at $445-450/mt CFR as reported last week.
