Turkish billet buyers are currently stuck between high import scrap prices and, moreover, expectations for further scrap price increases, and the poor rebar trade in most regions in the country’s local market. “It seems that the mills currently have no control over import scrap prices while their low demand does not allow them to achieve a rebar price increase, not locally, nor for exports,” a source told SteelOrbis. As a result, billet trade has been rather slow lately with prices fluctuating slightly on the import side, and stable - following rebar market trends - in the domestic market.
Current import offers from China are mainly evaluated at $475-478/mt CFR for March shipments, while most buyers are hesitating to enter serious negotiations, even though their own billet production costs are at around $525/mt and maybe slightly higher. One reason is the long lead time, while another factor is that the Turkish mills would like to deal with suppliers having CBAM certifications, since Chinese billet mainly comes from the BF steelmaking route.
Indonesian material is on offer at $450/mt FOB for April shipment, which is around $485-487/mt CFR and not of much interest in Turkey. On the other hand, the indications for Malaysian billet have been reported at $500-505/mt CFR, with the estimated workable level slightly below $500/mt CFR for cargoes with quicker shipment. No current offers are reported from Ukraine, considering some production cuts in the country, SteelOrbis understands.
The SteelOrbis reference price for ex-Russia billet is unchanged at $440-445/mt FOB Black Sea from late last week. There has been an extremely limited amount of offers from Russia and these small-volume offers have not been below $445/mt FOB, for March shipment. “There is no sense even to offer below $470/mt CFR Zonguldak,” a trader said. This level translates to $445/mt FOB. Also, some market sources believe that Russian exporters will remain quiet for some time and focus on fulfilling previous contracts.
Early this month, some ex-Russia billet bookings were done to Egypt at near $475/mt CFR, but, considering the $10/mt extra for DWR grade and the rather high freight rate, the major Russian exporters are not ready to give this low price.
In the domestic market, billet prices in the Iskenderun region are mainly at $505-510/mt ex-works and up to $515/mt ex-works for prompt cargoes. In the Izmir region, the indicative offers have been reported at $505-510/mt ex-works, while in the Marmara region billet is offered at around $520/mt CPT. The workable rebar price across the local market in Turkey is at $545-575/mt ex-works, with the most pressure on prices seen in the Iskenderun region.
In the meantime, Turkish billet seems to attracting some moderate demand in export markets. According to sources, 20,000 mt of billet for March shipment have been sold to Italy at slightly above $550/mt CFR. In addition, another inquiry has been heard from Morocco for 30,000 mt with a bid price at slightly below €485/mt CFR.