Turkey, Egypt secure steel cargoes from Southeast Asia amid disrupted supply chains

Southeast Asian steelmakers have found themselves unintended beneficiaries of new demand from Turkey and Egypt, as their usual sources of supply have been disrupted.

A deal for 50,000 mt ex-Indonesia to Egypt was sold by a mill to a trader at $490/mt FOB ST Indonesia. The deal was reported by another Europe-based trader who added that Egyptians were shifting from 130 mm to 150 mm as the smaller one was obsolete and more difficult to source. Another Chinese trading source said the deal was concluded at $495-$500/mt FOB Indonesia due to higher premiums for specifications.

A few other deals were reported April 16-17 concluded ex-Indonesia for 50,000 mt to Turkey at $490/mt FOB Indonesia, or about $525-$530/mt CFR Turkey, and another one for 50,000 mt ex-Malaysia, likely at the same price level.

Some lots of Indonesian pig iron and slabs were also booked for the same shipments, sources said.

According to Southeast Asian mills, 3SP billets were booked from $485-$500/ mt FOB Southeast Asia in the past two weeks as Chinese prices rebounded. Some cargoes were also booked from China to Turkey before the price hike.

Some market participants expected that 250,000 mt of semi-finished products were booked by Turkey and 150,000 mt cargo by Egypt during the period.

"Supply of Black Sea billets is limited due to payment issues and a resilient Russian domestic demand, but Egypt suddenly became the spotlight of growth," said a trader.

Israel started sourcing rebars from Egypt after Turkey imposed a restriction on selling steel products to the former amid the Israel-Hamas war.

Turkey's Trade Ministry has restricted 54 product groups to Israel, including steel and aluminum, with a decree published April 9.

Although Egypt was rolling out the New Cairo construction project and has announced the Ras al-Hekma joint project with UAE on the Mediterranean coast, market participants said demand isn't supposed to rise abruptly in a month.

"Probably it's just because that Black Sea billet is no longer considered a reliable source since Russia used to sell billets to Egypt," said a trader.

Southeast Asia mills raised billet offers to $500-$505/mt FOB Indonesia and FOB China.

A Turkish trader reported that Asian suppliers began to increase offers to Turkey following the rise of billet price in China. The source reported offers ex-Asia to Turkey at $535-$550/mt CFR Turkey, while Turkish buyers were looking for cheaper billet at below $530/mt CFR Turkey.

"This is why these price expectations of Turkey are not going to meet the price of sellers," the trader said, adding that Egypt at the same time was bidding higher.

Platts assessed 5SP 130 mm billet on a CFR Southeast Asia basis at $519/mt on April 18, $5/mt higher on the day, S&P Global Commodity Insights data showed.