Billet prices in Turkey have firmed up over the past week, including the domestic levels and the import offers for Asian origins. However, taking into account the previously concluded import purchases and the insufficiency of rebar trade activity, most of the mills are reluctant to pay higher levels for large billet tonnages for now. However, smaller lots from Russia and Donbass might be traded to Turkish merchant bar producers depending on their requirements, while the overall allocation of these origins remains limited in Turkey.
Over the past week, import offers from Asia have increased by $5-10/mt to $540-545/mt CFR for June shipments, namely for Malaysian, Chinese, and Indonesian origins. Prior to the holiday week in Turkey, as reported earlier, several large bookings were made mainly in the range of $515-525/mt CFR, but some sources reported China went down to around $510/mt CFR at that time. Despite that, the offers for billet of non-toxic origins are lower than the captive billet production costs of Turkish mills currently evaluated at $555-560/mt, and sources expect not many buyers are in the market to make a large import purchase. “Some of them booked earlier and maybe two or three buyers are there for some 15,000-20,000 mt lots and $535-540/mt CFR levels might be paid,” a trading source told SteelOrbis. Ex-Ukraine billet offers have been reported at $545-550/mt CFR Turkey for June shipments and, with a slight discount, the level might be considered by buyers due to the shorter lead time compared to supplies from Asia. It is worth mentioning that in Egypt ex-Ukraine offers have been heard at $565/mt CFR (including grade extras), whereas old ex-Asia position cargoes, according to sources, have been priced at $538-540/mt CFR.
In the case of smaller billet lots from Russia and Donbass, the allocation remains limited with only a few offers around. The cargoes from Russia for early May shipments are at $540/mt CFR Karabuk still and the bids of $525/mt CFR have not been accepted. Offers for 3,000 mt lots from Donbass have been reported at $525/mt CFR Turkey, with no deals concluded by the time of publication. One Russian mill is expected to return to the market next week with offers at $525-530/mt CFR, which translates to around $505/mt FOB Black Sea. “There is a very limited market [for sellers from Russia and Donbas] as the target level of $530/mt CFR would be hardly accepted [for June shipments],” a source said. The SteelOrbis reference price for ex-Russia billet has increased slightly by $5/mt on average since last week to $500-510/mt FOB Black Sea.
In the domestic market in Turkey, taking into account the scarcity of allocation, billet prices have increased to $570-580/mt ex-works, from around $550-560/mt ex-works seen earlier this month. And although the levels are not considered workable versus rebar at $590-610/mt ex-works in Turkey, some of the merchant bar producers might consider purchasing at these levels. Particularly, there has been talk about a billet sale at $570-575/mt ex-works Iskenderun. Many await the return of Kardemir with new billet sales and the lowest expectation is for the producer to offer at $550/mt ex-works.