Turkish billet hits $700/mt in local and export sales, further rise possible

Tuesday, 11 May 2021 17:40:29 (GMT+3)   |   Istanbul
       

The billet market in Turkey has, as expected, seen a sharp rise in all segments, following the recent surge in China and generally bullish sentiment among sellers. Moreover, higher levels have been accepted by local and foreign buyers for Turkish origin billet. Import offers have increased too, but sellers, especially the large ones, are trying to closely evaluate the potential for sales to China before trading billet to Turkey.

According to sources, an Iskenderun region-based Turkish mill has sold up to 20,000 mt of billet locally at $705/mt ex-works, up by $35/mt from last week’s sales. The supplier’s new offer is $710/mt ex-works for new production, while the level of $730/mt ex-works has been heard for some stock materials. In the Karabuk region, one mill has reportedly sold small lots at $697-698/mt ex-works this week. Generally, buyers in the area have been waiting for Kardemir’s move, though the integrated mill will most probably choose to wait until after the holiday.

In the Izmir region, no clear price has been reported locally with various levels being discussed. According to sources, the normal offer level should be at $690-710/mt ex-works, following the developments in other regions of Turkey and in the scrap segment. However, price indications and even some small deals for special grade billet have been voiced at up to $780/mt ex-works, which is clearly not a general market level for now. “The situation in Izmir is crazy because of the export billet sale, which is expected to result in limited supply in the region,” a trader told SteelOrbis.

The mentioned export sale has been reported at $700/mt FOB for around 40,000 mt closed to China recently, with freight estimated at over $60-65/mt. “Usually they [the mill] don’t export but there is no issue with the quality, so I don’t see why a trader should not be able to handle this,” one source stated. Another deal at $690/mt FOB has been actively discussed in the market, from a company based in the northern part of Turkey. However, some sources report that the deal was actually closed last week at $675/mt FOB, while the new offers at $710/mt FOB have not yet resulted in fresh reported deals. It is also worth mentioning that a lot of discussions were heard regarding billet sales from the Iskenderun region to China at $700-703/mt FOB. However, one of the potential sellers denied the information. Nevertheless, $700-710/mt FOB Turkey levels are considered workable as of now for the Chinese market and some deals may be heard shortly.

In the import segment in Turkey, some firm offers have been heard, only from traders, at $700-705/mt CFR (up $35-40/mt over the past week) depending on the region, but for small lots. Large CIS-based mills are not in a rush to offer to Turkey as the Chinese market seems much more promising.

A sale for 30,000 mt of ex-Ukraine billet has been discussed in the market as having been done on Monday at $765/mt CFR China. Taking into account higher freight for a cargo less than 50,000 mt, this price could translate to $690/mt FOB or so.

Steel mills in Tangshan have increased prices again on May 11, but the increase has been very small in comparison with the previous rises. At the moment the price is RMB 5,670/mt ($882/mt) ex-works in Tangshan, up by RMB 20/mt ($3/mt) from yesterday’s level. Excluding 13 percent VAT, this level corresponds to $781/mt.

Today, May 11, the market has been full of rumors about a sale at $790/mt CFR or $800/mt CFR, according to different sources, from Indonesia to China, but no one could confirm this information. “$800 CFR seems difficult for now,” a trading source said.

$1 = RMB 6.4254


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