Turkish mills stopped seeking active billet supply offers last week, except for one mill, which sold another large consignment to Saudi Arabia.
Traders willing to take long positions or those with active buyers were approaching Turkish mills, but only one, a Marmara-based mill, was willing to talk. In the end, the mill sold a 50,000-tonne regular consignment to a Saudi re-roller at a netback price of around $395/tonne fob, Kallanish learns. All other mills have closed March allocations and continue to pursue rebar sales, which have picked up somewhat domestically and in the export market in the last two weeks since scrap started rising.
Any trader willing to book Turkish billet should be considering a price starting from $400/t fob and higher, a sell side source says. This is because scrap, now at $275/t cfr for premium HMS 1/2 80:20, is pushing the billet price up considerably. At the same time, Turkish mills have imported enough billet at lower prices and appear to be content with March arrivals and shipments, ready for Ramadan in April. Unless scrap goes down again, it is unlikely that Turkish mills will reduce their billet prices for export. The prospect of European mills entering the billet and rebar export market is a dampener for both Turkish and CIS mills, traders say.
Turkish mills have exported over 200,000t of billet in the last two weeks to North Africa and Gulf Cooperation Council countries, Kallanish calculates. China's absence in the export market due to the coronavirus outbreak has been supportive as the absence of Chinese volumes has supported Turkish sales. At the same time, the effects of the virus on the ASEAN imports market is seen as deeply negative. There is a silver lining however in the potential generation of significant delayed demand, when the outbreak is over, traders say.