Given the strong scrap demand both in the US domestic market and coming from the Far East and also the reduced outputs of some CIS billet producers, CIS billet prices have this week continued to be strong compared to finished steel prices, even though demand for finished steel products has been weak in the Middle East and Turkey. However, traders' ex-CIS billet offers have this week registered a softening, just like last week. Nevertheless, no price decrease is being expected in the short term in both CIS and Turkish billet prices as scrap prices are still strong in general, as CIS producers have tightened their billet outputs and also as CIS producers have filled most of their order books for August and are now talking about September shipments. Against this, traders that are able to offer billets below the producers' price levels believe that prices may see a downtrend.
Meanwhile, it is thought that demand will continue to come from Egypt and other Middle Eastern countries for CIS billet, as it seems to have a greater advantage compared to Turkish billet. While CIS producers' billet offers to the export markets are currently at $400-410/mt FOB, it is heard that traders are mentioning levels of $410-415/mt CFR Turkey. Possible demand from Turkey for these prices may come from merchant bar mills (which are in better position as regards exports) rather than from rebar mills. However, in the international markets, various price levels for billets are being heard, mostly due to the uncertainty surrounding rebar prices. However, it is still not obvious whether Turkish billet offer prices in the export market (current level is at $420/mt ex-works, excluding VAT in the local market) will decrease to levels similar to the abovementioned CIS prices.