Chinese billet export prices have shown a significant slump over the past week, which has resulted in a couple of deals by Turkish steelmakers for significant tonnages in order to replace scrap imports which are still quite expensive. At the same time, the mood in the market has worsened since most of the alternative billet suppliers are finding it hard to compete with the aggressive ex-China offers.
The current Chinese billet offers to Turkey are at $485-495/mt CFR depending on the supplier and the tonnage, all for September-October shipments, versus indications of $495-510/mt CFR seen last week. According to sources, a 50,000 mt deal was closed at $485/mt CFR Izmir region, while another one was transacted at $490/mt CFR Marmara. Another 45,000 mt sale has been discussed in the market at $480/mt CFR Marmara, but it has been denied by the supposed customer. “The lowest deal level that we heard was at $485/mt CFR. Any lower would be speculation,” a Turkish mill said. While some buyers believe there will be a further softening of ex-China billet prices, many assume the levels are close to the bottom, especially if compared with current import scrap prices. “If we are talking about billet at $485/mt CFR, the scrap equivalent should be at an average of $340-345/mt CFR max,” a source told SteelOrbis.
“I think there will be a lack of price support in China in the near future. Only some appreciation of the yuan may add a few dollars to the export [billet price],” an Asian source said. Traders are still ready to offer to Asia and the Middle East prices equivalent to $450/mt FOB, while mills’ official levels are at $455-460/mt FOB.
Import billet offers from alternative suppliers in Turkey are being reported at higher levels compared to China, but still down over the past week. Ex-Indonesia billet is available at $500/mt CFR, versus the earlier concluded deal at $515/mt CFR Izmir, while Malaysia is offering at $515/mt CFR, versus $518-520/mt CFR in official offers last week. However, according to sources, some partial cargoes were sold last week from Malaysia by one of the mills at $512-515/mt CFR as SteelOrbis reported. A Ukrainian mill is now offering billet at $515/mt CFR base for September billet, while the latest deal was signed a couple of weeks back at $520/mt CFR. Another Ukrainian producer intends to offer at $525/mt CFR for October shipment, SteelOrbis has learned.