The lower-priced deals for imported scrap in Turkey disclosed this week have negatively affected the situation in the billet segment, which had already been shaky. The billet buyers, which expect a further drastic fall in the scrap segment, have started to place lower bids for semis, trying to secure some margins. In addition, the range of suppliers offering billet to Turkey has increased lately, putting pressure on Russian sellers.
In particular, there have been offers of billet from Malaysia at around $580/mt CFR for October shipments and Turkish buyers believe even lower levels may be possible in deals. Offers from Vietnam have also been seen at $590/mt CFR and, according to sources, ex-Indonesia suppliers have also stepped back to $590-595/mt CFR levels from the earlier announced $600-620/mt CFR. In addition, some market players have been reporting $570/mt CFR offers from China, being at the same time skeptical regarding such a price being possible. “I don’t think Chinese will give that price. I believe this is Russian [suppliers] changing documents with China,” a source told SteelOrbis.
In such a situation, billet sellers from Russia have started to feel even weaker ground in the Turkish market. Earlier this week, their offers were mostly at $580-590/mt CFR and deals at $565-575/mt CFR for small lots were considered by many as unnecessarily low-priced. Today, after a deep sea scrap sale at $363/mt CFR, the offers for imported billet have been reported at $565-580/mt CFR and, moreover, lower levels may also be possible. The highest bids have been reported at $560-565/mt CFR for ready cargoes, while the lowest bid has been voiced at $510/mt CFR since the customer expects a drastic drop in scrap prices. Next week, a large Russian producer is expected to conclude some deals with Turkey, and many foresee those at $555/mt CFR maximum, for October shipment. The suppliers of ex-Donbass material are expected to offer $560/mt CFR.