Integrated mills in the Gulf Cooperation Council are receiving many billet enquiries, mainly from Turkiye, and are mulling increasing billet supply and reducing rebar production during the upcoming Ramadan, Kallanish observes.

Jindal Shadeed in Oman, Emirates Steel in United Arab Emirates, Qatar Steel in Qatar and Hadeed in Saudi Arabia have received multiple billet enquiries from Turkey and are preparing to issue quotes. However, mills in the bloc are having difficulty assessing the Turkish market since rebar and billet quotes there have softened this week, while there have been no steps taken to remove Turkey’s import duty on rebar and billet.

The Omani mill is heard targeting $625-635/tonne fob, equating to $675-680/t cfr Turkiye, while Iranian-origin billet is available at $625-635/t cfr depending on tonnage, both for April shipment.

Sellers are throwing out 150mm 3sp billet offers at $640-650/t cfr Turkiye for April shipment to test the Turkish market, but even this price is not inducing interest. 

"After natural gas and electricity prices declined in Turkiye, costs decreased and Turkish mills are not ready to pay more than $630/t cfr, if the producer's country has no free trade agreement with Turkey," comments a senior mill official familiar with the Turkish market.

“The mills based in the earthquake area in Turkiye were granted a privilege, extending the inward processing regime from four months to the end of 2023. That means when they import billet they can export re-rolled rebar until the end of the year and mills won’t be under time pressure,” comments a sector analyst. “Mills in the rest of the country applied for the same regulation but, so far, no positive response was received from the Turkish government. Moreover, removing the import duty on billet and rebar has been rejected by the Turkish government.”

“I think a workable billet price for the Turkish market is $625-630/t cfr. If Russian billet would soften to $580-590/t fob from today’s $620/t fob, then billet buying activity will boost in Turkey,” opines a trader.

“Mills in the GCC should see the picture more realistically. Turkish plans for 4 million tonnes of rebar purchasing in 3-4 months, announced in mid-February, are not realistic, and gave a false message to the market and increased scrap and semis prices. I expect to see a price correction,” he adds.

Last week, the UAE and Turkey signed a free trade agreement, although it is unclear to what extent this will impact ferrous trade.