The recently seen significant price increase in the import scrap market in Turkey and, moreover, strong expectations for the trend to continue have triggered some interest in billet purchases, both in the import and local segments. Moreover, Turkish buyers have accepted higher levels for both and the suppliers intend to increase offers next week as scrap prices are foreseen to reach a new high.
Today, December 6, Turkish integrated mill Kardemir opened its 150 mm billet sales in the domestic market and has announced the prices at $559/mt for S235JR and $569/mt for B420 grade, both on ex-works basis. Around three weeks ago, the producer’s prices stood at $543/mt and $553/mt ex-works, respectively. In the current round, according to sources, Kardemir has managed to close sales in a short period of time with at least 37,000 mt sold, though some of the market players report the total volume should be close to 55,000-60,000 mt. “Even though it is a deferred price, it still means that the workable prices for billet in Turkey have increased,” a trader told SteelOrbis.
Aside from Kardemir, the price levels in the other regions of Turkey are estimated at $565-575/mt ex-works and up to $580/mt ex-works in some cases. According to sources, there has been a deal for around 10,000 mt from the Marmara region to an Izmir region-based buyer at $572/mt delivered with the freight estimated at $6-10/mt.
In the import segment, there has been some activity for non-toxic origins. According to sources, a 10,000 mt lot for January shipment has been booked from Algeria at around $555/mt CFR Izmir region, the cargo is from the position taken by a trader a couple of weeks back. In addition, Indonesia has been recently quite active in export sales and particularly a booking concluded at $508/mt FOB is evaluated as one destined for the Turkish market. Taking into account the reported freight and the trader’s margin, the CFR price is estimated at around $545/mt CFR Turkey for 50,000 mt. However, such a level is not available from Asia anymore as both Indonesia and Malaysia are at $555-560/mt CFR minimum for January shipments.
Higher scrap prices and bullish moods have also led to some rise in ex-Russia billet prices. In particular, a few parcels of 3,000 mt for January shipments have been traded at $530/mt CFR in the Black Sea area of Turkey. This price translates to around $505/mt FOB. Another large seller has also been indicating $530/mt CFR as possible sales levels, while one more Russian mill has voiced $540-545/mt CFR Aliaga for late December shipment. The allocation for the latter is 20,000 mt.
However, some suppliers have still been holding lower prices or staying away from the market. Offers for prompt shipment Russian and Donbass material are still at slightly below $520/mt CFR particularly in the Karabuk area and some cargoes have been booked with no details disclosed. The price level for December shipment in this case is based on the cash payment option, which usually means around $10/mt discount on the regular market price. “For January-February for big cargoes which can be bought with LCs with 180-day deferred payment as sub to scrap it will be a different story [pricewise],” a market source told SteelOrbis. For now, the indications below $520/mt CFR are excluded from the benchmark price range. It is also worth mentioning that last week a small cargo with similar conditions was sold at $525/mt CFR Izmir region.
Offers from Donbass have been limited. “We believe that for this region [Donbass] the market price will reach $510-515/mt FOB at some time,” a trader said.
As for other markets, a deal for 13,000 mt of ex-CIS billet has been done by a trader to Egypt at $540/mt CFR, similar to the sale reported last week. But new offers are expected to be at $545-550/mt CFR at the lowest, translating to $505-510/mt FOB.
The SteelOrbis reference price for ex-Russia billet has been settled at $505-510/mt FOB Black Sea, up by $7.5/mt on average today, December 6.