In Turkey, interest in imported billet remains at a low level, particularly for Asian origins, given the pending price uptrend, long lead times and overall market uncertainty.
While the prices from China are at high levels currently, import scrap prices in Turkey have been relatively stable with the cost of domestic production currently evaluated at $500/mt on average. Considering non-workable ex-Asia billet prices, Turkish mills are expected to increase capacity utilization rates of EAFS for September. Currently, they are evaluated at around 60-65 percent, while it is believed that an increase of 10 percent is possible without a major disturbance in scrap pricing and at the same time with minimal risks in terms of rebar sales.
Ex-Black Sea billet, being the only available nearby origin has the potential to see demand coming from Turkey, but this week Turkish buyers have preferred to wait as well. Instead, some deals have been closed for Turkish billet, both in the domestic and export markets.
According to sources, a higher billet price has been accepted in the Iskenderun region of Turkey with deals for over 20,000 mt closed at $510/mt ex-works, up from $500-505/mt ex-works seen earlier in the past week. In the Izmir region, offers are at $500-510/mt ex-works and at $510-512/mt CFR from the Marmara region. “Billet locally is quite workable versus rebar at $550-560/mt ex-works and above, and certainly less risky than buying from Asia in huge lots,” a trader said. In addition to deals in the local market, transactions for export are concluded in line with domestic price levels. Lately, one mill succeeded in selling 35,000 mt of September shipment billet to Morocco at around $500-505/mt FOB, SteelOrbis has learned.
Chinese billet offers to Turkey are now assessed at $495-500/mt CFR for September shipments with no serious discussions reported since no one is eager to make a large purchase for November delivery. Indonesian and Malaysian material is evaluated at $490-495/mt and $500-505/mt CFR, respectively, again with no interest seen among Turkish buyers.
Ukraine is in the market for September shipments with $500-510/mt CFR, stable over the past week, seeing not much feedback from the Turkish mills since the buyers prefer to watch the market at present. In Egypt, the latest ex-Ukraine offers are at $505/mt CFR base, versus $485/mt CFR base seen in the latest transaction closed last week for around 10,000 mt. Chinese billet offers to Egypt have been reported at around $500/mt CFR. Russian billet suppliers are asking for $480-490/mt CFR Egypt, but there has been no deal reported so far.
The SteelOrbis reference price for ex-Russia billet is stable at $440-450/mt FOB Black Sea. Most offers to Turkey are coming at $460-470/mt CFR. “If someone needs to buy [import billet], they will choose material with short lead times from the Black Sea,” a trader commented. But most buyers in the Turkish Black Sea regon have no urgent needs, so rare bids are still not above $455/mt CFR, which is equivalent to $430-435/mt FOB.