Turkey remains moderately active in the import billet segment, mainly due to high captive billet production costs, while the offer levels from abroad have improved slightly. Still, while the prices are quite workable, Turkey’s demand is less than expected due to uncertainty in longs export sales, market sources indicate.
According to market information, a Turkish steel producer based in the northern part of the country has booked a full cargo of ex-Malaysia billet at $493/mt CFR for April shipment. Some demand has also been reported from an Iskenderun region-based re-roller, while the offers received varied at $492-495/mt CFR. The latest deal to Iskenderun from Malaysia was at $486/mt CFR last week, as SteelOrbis reported.
By the middle of the current week, China and Indonesia have been offering at $478/mt CFR to Turkey, up by $3/mt at the end of last week. The rumors about deals at $470-475/mt CFR from China have not been confirmed by the time of publication and, according to sources, the talk originates from the evaluation that this level and even up to $480/mt CFR should be workable in Turkey. “It seems they [mills] are not confident about export markets and do not want to take the risk of import licenses,” a trader said. It is worth mentioning that currently Turkey’s own billet production cost stands at around $520-530/mt FOB for April-May, while Asian billet is available at $478-495/mt CFR for April-May shipments and June deliveries, still theoretically making the spread quite attractive for imports.
In the domestic market, the billet prices in the Izmir and Iskenderun regions are at $520-525/mt ex-works, while a Marmara region-based producer has been offering at $505-510/mt FOB lately, which is around $520/mt CFR Izmir. Local market players are waiting for Kardemir to announce prices on March 13 and thus the market picture is set to become clearer. However, the mill has been under pressure from the competition with Russia and Donbass lately over customers, and so Kardemir’s price policies have been downward lately. “It is not easy to increase prices back up after they drop their offers and sell large volumes. Logically, the prices would increase due to scrap,” a market source told SteelOrbis. Overall, buyers expect Kardemir to set the price at $500/mt ex-works for S235JR billet grade.
The SteelOrbis reference price for ex-Russia billet is stable on average compared to yesterday, but the range has widened by $5/mt, settling at $435-445/mt FOB Black Sea. Offers from Russia have been limited lately after the previous sales and as sellers are waiting for a firmer trend in Turkey. “Very small tonnages only for end-April shipment can be available and at a minimum of $460/mt CFR,” a trader said. There have been reports that previous small volumes for April shipment have been sold at $455/mt CFR, signaling that the workable price for ex-Russia material has failed to improve, at least for now. There has been a rumor about a lot of ex-Russia billet sold at $465/mt CFR to a Turkish steel mill, but no confirmation has been available at the time of publication and some buyers denied the rumor’s veracity.