Turkey region steel and scrap prices have been more volatile in the past weeks, with billet's recent price rebound injecting the biggest change and leading to convergence with rebar.
Ferrous scrap import pricing continues to be strong into Turkey, outpacing gains in rebar. Billet's recovery to $500/mt FOB Black Sea, from $450/mt a month earlier, renewed comparative price strength with scrap and rebar, analysis using Platts Turkey ARC indices showed.
Billet has regained strength again after more offers for the steel product. This developed after earlier scrap and iron ore weakness, ahead of a rise also in coking coal prices, with support now coming in from tighter raw materials markets and higher premiums paid for iron ore pellets.
Operating metrics for EAF mills have continued to fall from October's high, as implied melt margins were hit by the rise in Platts TSI scrap, rising at a faster pace than Platts rebar export spot price.
The monthly average for the Turkey export rebar melt margin fell to $204.93/mt in November, from a three-year high of $211.35/mt in October. As of Dec 8, the spread was $188/mt, falling 6% last week.
Re-roller margins in Turkey using Platts Black Sea billet and rebar export prices, with indicative shipment costs into Turkey, have pared back on billet's cost rise.
Export rebar subtracting billet landed in Turkey was at $21/mt on Friday, after a surge to $38.72/mt on average in November, from $9.94/mt in October.
Platts TSI Turkey HMS I/II 80:20 CFR scrap prices climbed to $352/mt on Friday, up $17.50/mt in a week, and compared to $312.91/mt CFR Turkey in November.
The S&P Global Platts Turkey ARC Scrap 30-day relative strength index rose to 4.2% Friday, equivalent to $14.79/mt over scrap's expected value for the month, using 30-day data with rebar and billet.
In November Turkey ARC scrap on a 30-day RSI basis averaged 1.13%.
The Turkey ARC data provides monetary values for the degree of dispersion around relative values generated through 30-day and 60-day trading history between scrap, billet and rebar.
Turkey ARC Rebar 30-day index fell to minus 1.88% on Friday, dropping from an average of 2.51% in November.
The Turkey ARC Billet 30-day index recovered to minus 1.15% on Friday, from a minus 3.57% in November. This shows rebar's relative pricing is currently the weakest of the three commodities.
In an environment of rising market prices and stronger short term expectations, the Turkey ARC Industry Composite's collective price index has risen to 90.25 points as of Friday, from an average 83.78 points in November.
The composite is the sum of Platts Turkey rebar, billet adjusted CFR and Platts TSI Turkey HMS I/II 80:20 scrap CFR pricing, with July 6, 2012 indexed at 100 points.
