Price offers for steel billet in Turkey came down after buyers rejected higher levels offered by steelmakers earlier in the week.
Steelmakers had pushed offers up on Monday after prices for steel scrap, a key steelmaking raw material jumped last week, but buyers showed no interested in purchasing at the higher levels, and producers were forced to reduce their offers.
Traders quoted offers from Turkey at $665-670 a tonne free-on-board (FOB) on Friday, down from $680 a tonne on Monday.
"The market is overheated. Prices are at the top end, and it wouldn''t be surprising to see the market taking a breather," a UK-based billet trader said. "Prices are probably going to soften a bit but I don''t see a massive dip."
Turkish steelmakers did not achieve any major sales to the export market in the last two weeks, and they have been focusing on the more active domestic market.
Mild weather conditions in Turkey were favourable for the construction industry, said a major consumer of steel long products. "Right now the domestic market is more important for us because it is more profitable."
Some CIS producers were offering billet at $660 a tonne fob this week after small sales at $650 a tonne last week. However, most Ukrainian and Russian producers were already booked out until March, a second UK-based trader told Reuters.
Steel scrap prices stood at $500-525 freight-and-cost (cfr) Turkey this week, similar to last week''s level.
U.S. scrap stood at about $515-525 a tonne cfr Turkey, while European material sold at $500-520 a tonne cfr.
One European steel scrap recycler, however, cut its offers by a few dollars a tonne as it looked to attract new sales. This could indicate that after a three-month run-up a peak has been reached, steel producers said.Scrap traders forecast, however, higher coking coal and iron ore prices after floods caused production disruption in Australia, a major producing region, which may put pressure on international scrap prices.In the meantime, China''s domestic prices for steel long products edged up this week on increasing raw material costs.
On the London Metal Exchange, three-month billet contract FMD3=LX traded at $582 a tonne, from a $610 close last Friday.