Billet trade has been on the low side in Turkey this week due to several factors. One is that previously buyers had booked rather large volumes of various origins and currently there is not much urgent necessity to restock. In addition, although scrap prices can be considered to be relatively stable, the effect of the recent electricity tariff adjustment is somewhat debatable at the moment: most sources assess the possible effect on costs to be around $4-5/mt, while some estimate the impact at up to $8-10/mt. Import billet bids from Turkish buyers have fallen by at least $5-10/mt and there is hardly a serious buyer nowadays, particularly for large volumes.
In the meantime, offers from Asia, particularly from Indonesia, have softened over the past week by $5/mt on the upper end to $520/mt CFR and a further $5/mt discount is considered possible. In addition, ex-China offers have been reported at $515-520/mt CFR with $510/mt CFR evaluated as a reachable level for around 50,000 mt lots. Both origins are for end of August-early September shipments.
The SteelOrbis reference price for ex-Russian billet has settled at $485-495/mt FOB Black Sea, stable on average over the past week. The lower end of the range corresponds to the highest possible bids from Turkey, where customers are asking for $500-505/mt CFR maximum, a number of market sources said. However, suppliers have been resisting the bearish mood. “The Turks are really bidding that low, but there has been no single deal at this price. As I understand, sellers don’t want to confirm it, so there will be no exports [from Russia] in the near future,” a trader said, also confirming that the previous offers at $515-520/mt CFR (around $495-500/mt FOB) are still the lowest in the market.
In the meantime, offers from Iran have been reported at $475-480/mt DAP to the Iskenderun and Karabuk regions and, according to sources, some small buyers may prefer to restock with this material.
At the same time, in the North African market, prices have also been under pressure from weak demand and strong competition. In particular, after some ex-Belarus deals at $540/mt CFR to Egypt earlier this month, which included at least $10/mt extras, the current tradable level for imported billet is at $510-525/mt CFR base, depending on the shipment and payment terms. Market sources said such low offers may come from Chinese suppliers to Egypt and Tunisia, but buyers are reluctant to purchase large lots. Moreover, “Egypt has almost fully stopped buying basic 3SP billet. It imports only material with high manganese content of 1.2 percent, and this grade is more expensive by some $10/mt,” a trader commented.