Posted on 19 Sep 2023
Turkish billet importers are assessing the potential consequences of selling finished steel made from Russian-origin billet in Western markets. Some of these buyers have therefore decided to postpone their bookings until after the Irepas industry gathering this week, market participants inform Kallanish.
A sharp increase in Russia’s domestic rebar prices and a strengthening rouble have been supportive factors for Russian producers. Domestic rebar prices have risen sharply since last month, by around RUB 15,000/tonne – or $155/t – to RUB 72,000/t cpt, including 20% VAT, or $620/t cpt excluding VAT, following NLMK’s longs division acquisition by a Tula Steel affiliate.
As a result of the acquisition, the latter now holds a dominant position in the rebar market in Russia’s Central region, the country’s largest consuming market.
Despite claims that Russia-origin material availability was limited, some buyers in Turkey were cautious over purchasing from this origin as it may limit their sales ability, particularly to EU markets.
Some Turkish buyers were reported to have hesitated after nearing deal confirmation at around $480/t fob Black Sea, citing concerns about selling finished steel to the EU rolled from Russian-origin material. This has been complicated further by the additional US sanctions imposed on Russian entities last week.
Meanwhile, Russian tier-1 producers were offering billet at $520/t cfr Turkish Black Sea ports, and tier-2 mills at $505/t cfr.
Traders’ offers stood at $505/t cfr Turkish Black Sea ports, $510/t cfr Aliaga, and $520/t cfr Iskenderun for prompt-shipment material.
A deal was heard done earlier, on Tuesday last week at $490/t cfr Turkish Black Sea ports for 5,000 tonnes. However, some suppliers of Russian-origin material believe selling below $500/t cfr was not a wise decision at present, considering the limited import offers. A Turkish supplier of Russian origin stated that claims of bookings at $485-490/t cfr were either speculative or involved purchasing sanctioned or black market material.
Two sources on the supply side mentioned that $505/t cfr Black Sea could be a viable price for customers in Turkey, although they were aiming for higher prices. Market participants were awaiting the Irepas gathering to determine their next steps.
As a result, Russian billet was assessed on Friday at $465-475/t fob Black Sea, up from $465-470/t fob on Tuesday.
Source:Kallanish
