The lively import scrap purchasing activity at higher prices last week for April and partially for May shipments and the subsequent steady rise in official domestic rebar prices have pushed up local billet prices as well. Although the higher rebar and billet offers are not met with sufficient demand, mills are standing firm, citing increased production costs due to scrap prices, logistics issues and the expected energy tariff hikes in April.
Last week, many deep sea import scrap deals were closed in the range of $385-398/mt CFR for HMS I/II (80:20) mostly for April shipments, but some were also for May. With these deals and the generally solid outlook for import scrap in Turkey, captive billet production costs in Turkey should be at $545-550/mt. While last week most billet prices locally stood at $530-540/mt ex-works and some deals in the Iskenderun region, according to sources, have been closed since then at $535-540/mt ex-works, the current indications across Turkey are closer to $540-555/mt ex-works.
Local official rebar offers are now standing at $595-615/mt ex-works depending on the region and up to $620-625/mt ex-works from some mills in the Marmara region. Although some activity by traders has been seen this week, many market players still believe the end-user side is rather quiet. “Stockists are buying bit by bit at every level, seeing that mills are serious about the price increases and that scrap bookings give them some kind of ground. But I don’t think we can say that seasonal demand, the demand we were waiting for, is now kicking in. It [the upturn] is still mainly expectation-based,” a local market source commented to SteelOrbis.
Import offers from China are mainly being reported at $515/mt CFR for end-of May shipments, up from $510-515/mt CFR at the end of last week. As SteelOrbis reported late on Friday, a 50,000 mt sale was closed at $508/mt CFR by one mill and most probably with two agreed ports of discharge.
Additionally, a 30,000 mt ex-Malaysia billet cargo for May shipment is said to be on offer at $530/mt CFR, while some sources have reported there has been a deal at the same level for a 10,000 mt lot. The indication for Indonesian billet is at $495/mt FOB or around $540-545/mt CFR, for June shipment. Ukraine is offering at $530/mt CFR for May shipment, in line with last week.
Billet suppliers of Russian and Donbass origins are now indicating $490/mt CFR minimum for April and early May shipments, up from deals at $478-483/mt CFR reported last week. In fact, according to some Turkish buyers but also ex-Black Sea billet suppliers, some targets are up to $500-510/mt CFR. The level is currently considered as being on the higher side but some buyers, especially those with delays in deliveries from Asia and able to work with Russia, may accept it to meet some urgent requirements. The SteelOrbis daily reference price for Russian billet to be shipped from the Black Sea is now at $460-470/mt FOB, up by $10/mt on average from the end of last week. The upper end of the range, however, is not yet considered workable.
