Billet buyers in Turkey have mostly been concluding purchases in the domestic market, where many longs and merchant bar producers have restocked with Kardemir’s billet, but some sales were also done in the Iskenderun region. While steel mills have been mainly focusing on scrap purchases, some of them have shown interest in large import lots, most probably in view of supply being limited for some origins.
Turkey’s Kardemir has announced new sales for domestic billet at $525/mt for S235JR grade and at $530/mt ex-works for B420 grade, both on ex-works basis. The supplier’s offers decreased by $5/mt and $10/mt, respectively, compared to around over one month ago, and the announced level has been considered by the market as an attractive one, especially in comparison with other domestic options. As a result, Kardemir has managed to sell close to 85,000 mt of billet within a short time. In fact, some Marmara-region based mills have booked 15,000-20,000 mt each, considered the price workable enough even despite the transportation costs by truck. Some sources estimate the delivered price of Kardemir billet to the Marmara region at around $550/mt.
As for other billet suppliers in Turkey, in the Iskenderun region deals for a total of 15,000-18,000 mt were closed since the end of last week at $550/mt ex-works, down $5/mt from the initial offers. In addition, a small lot was also sold at $560/mt ex-works recently, but for prompt delivery. Considering weak rebar pricing in the region and following Kardemir’s sales, buyers estimate the new workable billet price at $540-545/mt ex-works. In the Izmir region, the local billet price has decreased by $10/mt over the past week to $560/mt ex-works, SteelOrbis has learned.
In the import billet segment, some interest has been seen in Chinese billet, which was on offer at $525-530/mt CFR this week, mainly for end-of-August shipments. However, although bids earlier this week stood at $515-517/mt ex-works, there has been information in the market about two cargoes booked in the mid-$520s/mt CFR. Market players assume that the deal prices for these is a little higher than the market level, most probably due to the currently limited supply, with basically China being the supplier offering large lots at the moment. In addition, by the time of the arrival of the billets in Turkey (September-October), rebar prices are expected to be high enough due to seasonal factors in order for the mill to have some margin.
No offers from Indonesia and Malaysia have been reported since the suppliers there tend to focus on alternative destinations as well as on other steel products in terms of sales. Ukraine is also out of the Turkey’s market due to higher workable prices in Europe and scheduled maintenance works at some facilities in July and August, SteelOrbis has learned.
Ex-Iran billet offers have reappeared in the Turkish market since last week, now standing at $480-485/mt CPT Iskenderun region and $485-490/mt CPT Karabuk. Despite the concerns of working with Iran mainly considering the logistics involved, buyers overall evaluate the offered level as workable. “Iran’s volumes are back, but it will hardly affect local prices. More likely it will take a piece [of buyers’ orders] from the Russians, since they are in similar positions,” a source told SteelOrbis.
Not many changes have been seen for ex-Russia billet prices with no new deals reported to Turkey after that done at $510/mt CFR (or around $485/mt FOB) in late May. Offers have been rare and are still at near $515/mt CFR to Turkey, while buyers’ price ideas are not above $505-510/mt CFR. “There is no interest in Russian billet [in Turkey] due to its high levels. CIS [Russia and Donbas] offers are too high due to the US dollar-ruble exchange rate,” a buying source said. The Russian ruble appreciated to a peak point of $1 = RUB 71 in the second half of May, but, even though it has declined slightly to $1 = RUB 72-73 in June so far, the exchange rate is still assessed as being very unfavorable for exporters. Producers have faced a continuous appreciation of ruble (the latest most favorable rate was at $1 = RUB 80-85 in March) and have resisted cutting export prices, especially for low-margin products like billet. The SteelOrbis reference price for ex-Russia billet has remained stable at $485-490/mt FOB Black Sea.
