flood of chinese billet import in turkey as sign of radical market changes
TRANSCRIPT
Flood of Chinese billet import in Turkey as sign of radical market changes
June 16, 2015
Andrey Pupchenko, Deputy Managing Director, Metal Expert
Turkey's steel production dynamics
Turkey's producers reduce output mainly at EAFs
© Metal Expert
-900,000 t
0
1
2
3
4
5
6
7
8
9
Q2 14 … Q2 15*
mill
ion
t
BOF
EAF
*- Metal Expert's estimate
Billet import into Turkey
400,000 t of Chinese billets to arrive in Turkey in Q2, Metal Expert estimates
© Metal Expert
0
200
400
600
800
1000
1200
1400
1600
Q1 14 … Q4 14 Q1 15 Q2 15*
'00
0 t
China
Others
CIS
Cost of rebar produced in Turkey from different semis and raw materials
Cost of rebar produced from Chinese billets will be $43/t lower as compared to cost of rebar from US-
origin scrap at $285/t CFR
© Metal Expert
447
417
404
380
390
400
410
420
430
440
450
460
from USA scrap from CIS billet from Chinese billet
$/t
Import of semis and scrap into Turkey
Billets begin to replace scrap in Turkey's import
© Metal Expert
0
1
2
3
4
5
6
Q1
14
Q2
14
Q3
14
Q4
14
Q1
15
Q2
15
*
mill
ion
t
billet scrap
*- Metal Expert's estimate
200
250
300
350
400
450
500
550
Ja
n.1
3
Fe
b.1
3
Ma
r.1
3
Ap
r.1
3
Ma
y.1
3
Ju
n.1
3
Ju
l.13
Au
g.1
3
Se
p.1
3
Oct.1
3
No
v.1
3
De
c.1
3
Jan.1
4
Fe
b.1
4
Ma
r.1
4
Ap
r.1
4
Ma
y.1
4
Ju
n.1
4
Ju
l.14
Au
g.1
4
Se
p.1
4
Oct.1
4
Nov.1
4
De
c.1
4
Ja
n.1
5
Fe
b.1
5
Ma
r.1
5
Ap
r.1
5
Ma
y.1
5
Ju
n.1
5
$/t
billet from CIS steel scrap from USA
98 $/t
147 $/t
Prices in Turkey, on CFR basis
The difference between billet and scrap prices reduced by almost $50/t over 2 years and a half,
making billet purchases highly attractive
© Metal Expert
Major factors
1) EAF steel production decrease in Turkey; import of ferrous scrap follows
2) Market for imported billets almost doubled in Q1 y-o-y
3) In Q2 China's share in billet Turkey's import is expected to increase from 0% to 28%
4) Rebar production cost using Chinese billet is $43/t below that using imported US-origin scrap
5) The difference between billet and scrap prices is historically low, making billet purchases highly attractive
© Metal Expert
What it is about
• New billet importers in the region, changes in market structure
• Estimates of billet consumption in the whole region, by countries and by new re-rollers
• Competitiveness analysis: comparison of billet production costs of main exporters into the region and local suppliers
• Comparison of rebar cost produced from different semis and raw materials (i.e. CIS-origin billets, Chinese-origin billets, the US and European scrap, HBI/DRI)
• Forecast of billet export into the region by CIS and Chinese producers
• Three-month price forecasts for billets in main importing countries (Turkey, Saudi Arabia, Egypt)
Exclusive statistics
• Steel-melting and re-rolling capacities in MENA
• Square billet export by CIS plants
• Turkey billet market structure
• GCC billet market structure
• Egypt billet market structure
Metal Expert provides exclusive data and analysis in new report MENA Billet Markets
MENA Billet Markets is published twice a month
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