Turkish longs producers are still hardly interested in distant billet imports, not willing to bear the risks of long lead times, particularly from Asia. In addition, while import scrap prices have been softening, the billet offers from China have increased this week, thus completely discouraging buyers from negotiations. Instead, a spike of demand has been seen in the domestic billet market with sizeable lots booked in the past week.
In particular, according to sources, up to 45,000-50,000 mt of billet have been sold in the Iskenderun region at $500-502/mt ex-works, while some deals, most probably for prompt delivery, were closed at $506-508/mt ex-works last week. In the Izmir region, medium-sized lots have been sold at around $500-505/mt ex-works. “They [Turkish longs producers] can buy locally at $500/mt and have billet in a week or several weeks. Paying $10-15/mt lower for imports for November shipments currently makes no sense,” a trader told SteelOrbis. In the meantime, Turkey’s domestic billet production costs are now estimated at $490/mt considering the weaker scrap price.
Import offers from China have increased by $10/mt over the week to $480-485/mt CFR, mainly being a result of higher raw material futures in China. The latest deal, resulting from many rumors in the past week, was at around $470/mt CFR, although sources also reported $468/mt and $471.5/mt CFR prices for the transaction. Most sources consider the price of the discussed deal to be on the high side, especially for the market situation in the past week. Malaysian billet offers are at $490-495/mt CFR for November shipments, unworkable against the domestic billet price in Turkey. A Ukrainian mill continues to offer at $490/mt CFR for November shipments.
Buyers’ price ideas for ex-Russia billet have moved down after the announcement of duty in Egypt. In particular, some buyers have been targeting $445-450/mt CFR Turkish Black Sea. But “I can’t imagine who can offer such a low level. Russian mills are offering at $440/mt FOB Novo,” a trading source said. There has been some talk about recent deals done at $460-465/mt CFR to Turkey, but most SteelOrbis sources agree that this level, even though in line with previous sales, is unlikely to be workable now. “I think buyers want too low, and the new [tradable] level will settle somewhere at $450-460/mt CFR,” a Turkish source said. This price level translates to around $430-435/mt FOB Black Sea.
The SteelOrbis reference price for ex-Russia billet has posted a small decline, considering lower bids heard this week, to $435-440/mt FOB, versus $440/mt FOB last week.