Turkish billet importers are assessing the potential impact of selling finished steel produced from Russian-origin billets on Western markets. Therefore, some of these buyers have decided to defer their orders until the Irepas industry meeting this week.
Sharp increases in domestic rebar prices in Russia and the strengthening of the ruble have been supportive factors for Russian manufacturers. Domestic prices for rebar have increased sharply since last month by approximately 15,000 rubles/t (or 155 dollars/t) to 72,000 rubles/t including 20% VAT or 620 dollars/t excluding VAT.
Some buyers in Turkey have been wary of buying materials of Russian origin as it could limit their sales opportunities, especially in EU markets.
Some Turkish buyers were reported to be hesitant after the deal was confirmed at a price of around $480/t FOB Black Sea, citing concerns about EU sales of finished steel rolled from material of Russian origin. The situation was further complicated by additional US sanctions imposed against Russian enterprises last week.
Meanwhile, Russian first-tier producers offered billet at a price of $520/t CFR in Turkish Black Sea ports, and second-tier factories at $505/t CFR.
Trader offers were $505/t cfr Turkish Black Sea ports, $510/t cfr Aliaga and $520/t cfr Iskenderun for fast shipping material.
The deal was concluded earlier, on Tuesday last week, at $490/t cfr Turkish Black Sea ports for 5,000 tons. However, some suppliers of Russian-origin materials believe that selling products below $500 per tonne CFR was not a wise decision at this time, given the limited import supply. The Russian-origin Turkish supplier said claims of orders priced at $485-490/t CFR were either speculative or related to the purchase of materials subject to sanctions or on the black market.
Two supply sources noted that $505/t cfr Black Sea could be an acceptable price for buyers in Turkey, although they were seeking higher prices. Market participants were waiting for the Irepas meeting to determine their next steps.
As a result, Russian logs were valued on Friday at $465-475/t FOB Black Sea, compared to $465-470/t FOB on Tuesday.