Posted on 12 Dec 2019
Turkish mills' billet offers continue to increase, with general levels of offers around $425-430/tonne fob for export sales and $415-440/t ex-works and delivered for domestic transactions, sources in the market tell Kallanish.
The new higher price tags are driven by costlier scrap, which is nearing a $300/t cfr mark for premium HMS 1&2 80:20 but demand at this level remains somewhat limited to domestic sales only. With CIS billet offers at $400-415/t fob, depending on the producer, Turkish mills could entice export buyers by offering material with short lead times, traders note.
With domestic billet offers from local producers at a higher, $430-440/t exw levels, according to sources, some re-rollers are opting for traders' material, which can still be obtained at $405-415/t cfr. This window is closing fast however, it appears. Turkish re-rollers are limited by rebar prices at current $430-440/t fob levels. News of billet price increases is also sending the message that demand for billet continues to outstrip that for rebar, which is in turn reflected in the pricing. But many doubt the viability of a $25/t price increase in one week, following a domestic producer's sales of billet at $405-410/t exw just over a week ago.
The market is approaching the many thresholds simultaneously, such as the new year. This is bringing strong indications for another price rise in the US scrap market, and the beginning of stocking up for new construction season in Western Europe in January. Concerns still remain however as to whether rebar prices will see the significant-enough price increases necessary to keep rising price momentum going, sources say.
Without a finished products’ price rise to match those of scrap and billet, re-rolling capacities would eventually be curtailed again in the new cycle. Despite the rebound of price in all major regions, there are still concerns regarding sustainability of scrap price increases, and their longevity, as the driving force in steel pricing, one market source concludes.
