Billet trade in the Black Sea region and particularly in the Turkish market has slowed this week, following the loss of momentum of the scrap price uptrend after many purchases were concluded. The market mood has calmed down for billet, after some purchases done last week and since some players have started to expect a retreat in prices. In particular, the higher targeted offers from Russia did not gain acceptance and workable FOB levels have been corrected downwards. Instead, Turkey's steel mills have revealed some interest in non-Russian origins, particularly from the MENA region. In the meantime, the re-rollers have booked small lots from Russia for prompt shipments.
Market players report that a billet cargo from Saudi Arabia has been freshly booked to Turkey at slightly below $560/mt CFR Izmir for January shipment. It is widely assumed that the sale is a top-up for a 50,000 mt vessel, already including slab sold earlier to a Turkish flats producer in the same region. In addition, according to market sources, a 10,000 mt billet position cargo from Algeria has been sold this week at slightly above $555/mt CFR, for shipment in the first half of January.
The SteelOrbis reference price for ex-Russia billet has been corrected to $512-515/mt FOB, versus $515-520/mt FOB late last week. Offers have been reported at $540-545/mt CFR and a few sources admitted that higher levels have failed to be confirmed in new contracts, while the previous deals were done at $530-535/mt CFR last week. According to sources, one of the sellers from Russia has traded a total of 20,000 mt of billet to the northern part of Turkey in four lots from $538/mt CFR to $545/mt CFR to be shipped from Novorossiysk mainly in the first half of January. Generally, the moods are calm regarding the billet prices nowadays and many expect a market weakening. “It is hard to say [if prices will go down now], but the market may correct slightly,” a market source said.
Russian billet sellers have failed to push volumes in markets other than Turkey too. The latest offers have been at $550-555/mt CFR, but “there were no new sales of billets in the market in the past 10 days,” a source from Egypt said.
Sentiment in the Asian market has been hit today by the significant drop in futures prices in China, which may affect ex-Asia billet pricing some time soon, sources believe, even though ASEAN mills have almost sold out January shipment export allocations of semis and have hiked offers since late last week. “The hype is over now. The meeting of the Central Economic Work Conference has ended [in China, with some less-than-expected results], that’s why local prices are dropping now. The actual demand is still low,” the representative of a Chinese mill said.
However, at least for now, billet offers from Asia in Turkey are the highest and are not workable. According to several Turkish buyers, Malaysian and Indonesian billet indications are at $570-580/mt CFR depending on the tonnage, while some believe $560-565/mt CFR should still be available via traders with positions taken earlier.
In Turkey’s domestic market, a 3,000 mt sale has been reported at $592/mt ex-works, up slightly from $590/mt ex-works seen late last week. Most sources still assume this is not a market level and can refer to only small volumes purchased in order to cover urgent requirements. “For 10,000 mt lots, the level should still be at $570-580/mt ex-works tops,” a source told SteelOrbis.
