Billet trading activity has been quiet in Turkey this week since buyers are reluctant to pay the current prices which they consider to be a little on the high side, while rebar sales have remained slow, with prices sliding in terms of workable levels. Turkish billet sellers, on the other hand, are unwilling to provide discounts considering their high production costs and the prospects of import scrap prices being largely maintained around their current range. Import billet offers are also considered to be slightly overpriced, given the available lead times from Asia in particular. The suppliers of Russian and ex-Donbass billet have a better opportunity to trade under the current market conditions and their attempts to push some volumes have met with some success.
This week, workable rebar prices have settled at $545-570/mt ex-works across Turkey, with $540/mt ex-works available from some mills for cash payments, SteelOrbis has heard. Local billet prices in the Izmir and Iskenderun regions have remained at $505-510/mt ex-works, with little interest seen from buyers. The suppliers are seeking to sell for March deliveries, SteelOrbis understands. In the meantime, domestic billet production costs in Turkey based on the current import scrap prices stand at around $520-525/mt, causing local billet suppliers to resist the pressure from buyers to drop their prices.
Import offers from China have been mainly reported this week at $475-478/mt CFR, basically in line with last week. The cargoes are available for end-of-March and April shipment. Sources indicate that the interest in these is quite low at the moment due to the long lead time and the shaky market conditions in the longs segment. Some demand may be seen at $470/mt CFR and below, but it seems this level is not quite reachable at the moment. Ex-Malaysia billet indications are still reported at $510/mt CFR, following a position cargo sold in late January at slightly above $495/mt CFR. Indonesian billet is offered at $455/mt FOB, which is up to $490/mt CFR for shipments in April. Ukraine remains out of the market due to war-related production and logistics issues.
The SteelOrbis ex-Russia billet reference price stands at $442-450/mt FOB Black Sea with the midpoint at $446/mt FOB, inching up by $3.5/mt, mainly amid still limited offers in the market and some deals done in late January-early February. A number of deals from two Russian suppliers have been heard at $462-468/mt CFR to Turkey last week and this week. Though most exporters targeted $470-475/mt CFR or $450/mt FOB, they managed to conclude deals for March shipment only after providing discounts. Though the exchange rate has improved slightly from last week’s low of US$1 = RUB 75 to US$1 = RUB 76.8 today, February 4, it is still very bad for most exporters.
