Turkish billet manufacturers maintain optimism

Turkish billet exporters remain optimistic, keeping offers in the range of USD 450-460 per tonne for Turkey grade. However, as traders say, competition from European suppliers in their traditional markets is too high and this could lead to lower prices.

Competition from European factories in North Africa is intense, with European bids at 390-410 € /t (437-460 USD /t), depending on the supplier, from "... all over Europe, not just South ". This range covers the range of offers from suppliers in the CIS and Turkey, and it is very compatible, as Turkey and Europe export duty-free to the countries of North Africa, traders note.

Algeria and Egypt are targeting a maximum price of $ 460 per tonne, or in Morocco at € 415 per tonne, while Tunisia "... may consider bids at $ 455 per tonne," traders working with the region say. With supply at these levels, there is likely to be a deadlock for a while until Turkish factories have better scrap availability. However, opinions are divided as to whether scrap prices will decline significantly, supported by high iron ore prices.

Sources say the success of Turkish mills in sustainably managing scrap-to-stock ratios will depend on new scrap deals with a target range of US $ 300-310 /tonne. Such deals are expected to be discussed at an industry event taking place every two years in Barcelona early next week. But "... the demand for scrap is good and maintains current price levels - scrap is relatively cheaper than pig iron and is used more as a payment," notes an experienced market observer.

Market participants note that there is “too much negative news” to strengthen the market. They cite weaker-than-expected demand for finished products in the main regions of steel consumption, despite the high season, and constantly growing competition amid growing guarantees. With Ramadan approaching, many traders believe that the end of the active restocking phase this construction season could come earlier than June, further weakening an already soft market.