Turkish steelmakers may have to cut billet offer prices soon because buyers are rejecting offers on expectations of a correction due to lower steel scrap prices, traders said.
Traders quoted Turkish billet offers free-on-board (fob) at $660-$670 a tonne this week, compared with offers last week at $665-$670 a tonne fob.
"I haven''t seen any activity for almost two weeks now so mills may put prices down. I believe (billet) prices should be closer to $630-340 fob," a London-based trader told Reuters.
He added that the Asian market, which had been quite active in November and December, was very quiet because of the approaching Lunar New Year, which starts on Feb. 2.
"If demand in Asia picks up in February and takes some Black Sea billet away from European and Middle East buyers, then maybe we will see prices stabilizing," he added.
Steel prices in the Chinese domestic spot market remained unchanged this week despite lacklustre demand ahead of the week-long New Year holiday, propped up by rising raw materials cost.
Some African, Iranian and Middle-Eastern customers showed interest for Black Sea billet and rebar but made no purchases this week in anticipation of prices tracking steel scrap lower, traders and producers said.
Steel scrap is a major raw material for long steel products.
No steel scrap deep-sea cargoes were sold by Turkish producers this week, but offers from Europe and the U.S. were $10-$20 a tonne down from last week, at $485-$505 a tonne cost-and-freight (CFR) Turkey.
REBAR OFFERS
Turkish rebar offer prices were unchanged from last week at $690-$710 a tonne fob Turkey and no major export sales were agreed.
Turkish mills have also lost customers in the domestic market as local traders liquidated stocks and sold below the mills'' offer prices.
"Domestic traders are selling rebar at the moment and mills are waiting for them to finish before selling at higher prices," a Turkish-based trader said.
Traders sold rebar at $680-$690 a tonne ex works, while producers were offering material to the domestic market at $690-700 a tonne ex-works.
CIS steel producers did not offer this week. Some mills were booked out until February while others were watching the market and waiting before coming out with new offers, traders said.
On the London Metal Exchange, three-month billet contract FMD3=LX traded at $570 a tonne, from a $575 close last Friday.