The billet market remains inactive in Turkey, especially its import segment. Most buyers refrain even from serious negotiations, while voicing considerably lower price ideas to sellers, compared to the official offers. The market is generally waiting for import scrap deals to see the workable billet pricing more clearly.
With the sluggish demand from Turkey, the number of serious offers in the import billet segment has been limited. According to sources, some sellers of Russian and Donbass origins are at $580-595/mt CFR and there has been information about a sale at $580/mt CFR of 3,000 mt. Some traders were asking for $585/mt CFR for May-June shipment billets. The SteelOrbis reference price for ex-Russia billet has slipped slightly further, by $5/mt to $560-570/mt FOB, down $10-25/mt week on week. This decline is due to lower tradable levels as well as weakening offers.
Along with the offers from Russia and Donbass, Turkey has continued receiving indications for other origins. Ex-China offers are now at $605/mt CFR, down $5-10/mt since earlier this week and the price is considered to be further negotiable. Indonesian billet is available at $605-610/mt CFR. These levels are not considered workable, given the long lead time and the fact that they are in line with Turkey’s own production costs. “With scrap let’s say at $435/mt CFR for premium quality, captive billet production will be at $605-610/mt tops, so there is absolutely no point in paying the same levels for import billet and waiting for 1.5-2 months for it to arrive,” a trader said. In this situation, the ex-India and ex-Bahrain indications at $630/mt and $650/mt CFR Turkey for position cargoes are not seriously taken into consideration in Turkey.
The expected deep sea deals for import scrap are expected to settle the workable price for billets and trade is foreseen to start moving. Still, Turkey will most probably purchase billets in modest volumes. “Scrap is expected to move down and most probably mills will prefer to run their own capacities. If there were no cost cuts due to lower energy prices, import billet may have been more in focus in Turkey, but in this case I think no large cargoes will be seen, maybe 10,000-15,000 mt tops,” a source told SteelOrbis. However, aside from the steel producers, Turkish re-rollers are expected to be in the market for 3,000-5,000 mt lots at least, aiming to source locally, but also from the import side, since domestic supply in Turkey is nowadays limited.
Domestic billet prices in Turkey stand at $630-660/mt ex-works, including Kardemir’s sales at the lower end of the range. The integrated mill managed to trade only medium-sized lots and its sales are still open as demand is not so bright. In the Iskenderun region, billet prices remain indicative at $640-650/mt ex-works since there are no deals. Mills in the Izmir area are refraining from giving offers, but buyers expect nothing less than $650-660/mt ex-woks due to the supply scarcity.
