The Turkish long steel supply chain on Tuesday felt more downward billet pricing pressure, with scrap and rebar remaining relatively stronger.
A drop in billets and firmer rebar prices enlarged the gap and amplified inverse relative pricing trends between the two products. Scrap was stable, with deepsea transactions likely slowing after any deals around current prices get finalized.
Scrap's relative value to iron ore was at 3.09:1 Tuesday, using Turkish delivered scrap prices and Platts IODEX 62% Fe fines, each adjusted for iron content. The metric remains stronger at over threefold to iron ore for the past few weeks, after moving up from a 2.26:1 ratio for October averages and closer to 2:1 earlier in the year.
The Platts Turkey ARC Scrap 30-day index was at 0.63% on Tuesday, down from 0.93% on Monday and compared with 0.16% in relative strength over rebar and billet a week earlier.
The Turkey ARC Billet 30-day index dropped further to minus 3.72% from minus 2.6% Monday and minus 2.95% a week earlier.
The Turkey ARC Rebar 30-day index strengthened to 1.7% relative strength over its two peers on Tuesday, up from 0.97% Monday and 1.54% a week earlier.
The degree over and below zero marks the commodity's price deviation from the 30-day and 60-day average price relationship for the three-product group, based on the Turkey ARC's analysis.
On a 60-day basis, the Turkey ARC indexes showed scrap at 2.54%, billet at minus 5.18% and rebar at 1.85%, with billet remaining the weakest of the three over longer-term indicators as well as in the 30-day analysis.
The key rebar/scrap spread was at $134.50/mt Tuesday, as implied melting margins remained weak.
Rebar's margin over billet CFR Turkey basis was at $62/mt, as conversion margins for re-rollers further improved on weaker priced regional billets.
