Turkish billet buyers have uninterested in imports lately, taking into account sliding scrap prices, the unstable situation in China and the generally cautious mood in the market. In the meantime, while most CFR-based prices, except those from China, have remained relatively stable over the past week, some interest may be seen in small and medium-sized cargoes with short lead times, while the workable price ideas for 45,000-50,000 mt lots are significantly below the current offer price levels.
According to sources, this week most ex-China billet offers are at $500/mt CFR and down to $497-498/mt CFR in some cases, while earlier the offers were at a minimum of $525/mt CFR as an indicative level. Sources expect that the maximum price that Turkey would pay for ex-China billet is around $480-490/mt CFR currently. In the meantime, taking into account the weaker scrap prices, Turkish billet production costs are evaluated at $530-535/mt. "I think for now that scrap will resist at $365-370/mt CFR for EU origin and $370-375/mt CFR for Baltic and US origins. But it is also important to see the trend in China," a trader told SteelOrbis. Many believe that, if there is a stabilization of import scrap prices and no drastic move in ex-China prices, there may be some interest in bookings of billet of this origin in Turkey.
Other Asian billet origins are on offer at quite high levels in Turkey and mostly considered to be unworkable. According to sources, the Indonesian supplier's billet price indication stands at around $520-525/mt CFR, but, since it is for February shipment, the price is of no interest in Turkey. The same price for billet, but for end-of-December shipment, in being offered from Vietnam, which is not a frequent player in Turkey's import segment.
In the meantime, billet offers from Malaysia have been reported for end-of-December shipments at $520/mt CFR for 165 mm billet and at around $530-535/mt CFR for 150 mm billet. While currently there is no feedback from Turkish customers, some sellers are expecting there might be some demand from the Iskenderun region, where currently both local rebar and billet prices are the highest in Turkey - at $630-635/mt ex-works, and $580/mt ex-works and up to $600/mt ex-works, respectively. "The Iskenderun [region-based] re-rollers, if their demand is combined, in theory can buy a couple of 50,000 mt cargoes from Asia. But since most of them are not active exporters, it has to be Malaysian origin," a trading source told SteelOrbis.
Ex-Russia and ex-Donbass billet offers are indicative at around $490-500/mt CFR for November-December shipments, the same as at the end of last week. No movement has been seen in terms of sales, although some small buyers in northern Turkey may buy some 3,000-5,000 mt lots. In addition, the leading Russian exporter is expected to offer a 20,000-30,000 mt lot for December production, which is foreseen to be priced at around $500-510/mt CFR maximum due to sanctions. As a result, for now the SteelOrbis daily reference price for ex-Russia billet is at $475-485/mt FOB, the same as at the end of last week.