Billet prices in Black Sea ports last week, from 16 to 23 June 2023, decreased by 1% compared to the previous week to $ 505-515 per tonne.
Meanwhile, billet prices declined by $20 per tonne in Turkey, or 3.3%, and reached $575-580 per tonne on June 23 as activity in the market slowed down as consumers and producers adapted to the new level of interest rates. The market expected that interest rates change and the lira would stop depreciating, but this did not happen.
Conversely, with the local currency crashing to a record low, market participants’ confidence in prospects has diminished. Amidst this, the Turkish market took a wait-and-see attitude, putting pressure on prices. In addition, the approaching Eid Al-Adha holiday from June 27-July 1 was a restraining factor for the market.
Russian suppliers, who mainly sell billets to the Black Sea ports, are currently cautious in selling their products as they assess the market situation against the backdrop of the ruble’s depreciation.
The export demand for Russian products has become limited since the major buyer – Turkiye – is presently suffering from macroeconomic problems and the low competitiveness of finished steel in world markets. The principal sales of the Russian billet are directed to the domestic market and the CIS countries.
Ukrainian and Asian production was offered to the Turkish market at $550/tonne – this level is unprofitable for domestic steelmakers.
Billet trade in the Turkish market will depend on the solution to economic problems within the country shortly, as well as the situation in the scrap market.
Global scrap prices fell in most of the global markets, and scrap quotations in Turkey for the week of 19th to 26th June were $378-382/tonne, down by $1/tonne compared to the previous week with limited market activity due to macroeconomic problems pressuring the finished steel products sales and demand for raw materials.
Domestic steel trade is expected to resume after Eid al-Adha, therefore, scrap prices may rise slightly. The central bank may introduce additional interest rate increases to contain the lira depreciation.