During the week ending May 29, Russian billet export prices from Black Sea ports declined to $485-488/t FOB, compared to $488-490/t FOB a week earlier. The correction was mainly driven by reduced purchasing activity in Türkiye, one of the largest consumers of Russian semi-finished steel products.
Turkish steelmakers have become increasingly cautious with raw material purchases as domestic rebar demand remains weak. As a result, many mills are delaying new billet bookings and limiting inventories until market conditions improve.
Competition in the Turkish market has also intensified. Chinese billet offers for July-August shipment have fallen by $10-15/t over recent weeks to $525-530/t CFR Türkiye, putting additional pressure on other suppliers. Russian billet is currently offered at around $515-520/t CFR Türkiye, but buyers are reportedly targeting lower levels of $505-510/t CFR, creating a gap between seller expectations and customer bids.
Despite the softer market environment, Russian exporters have limited flexibility to reduce prices further. A strong ruble and elevated production costs continue to squeeze margins and restrict the ability of mills to offer significant discounts.
The rally seen earlier this year was largely supported by disruptions across the Middle East. Geopolitical tensions increased freight costs, pushed up iron ore prices, and reduced steel production in several regional markets. Lower output from Middle Eastern producers, particularly Iran, helped support demand for alternative billet suppliers, including Russia.
However, market participants believe the positive impact of these factors is gradually fading. While previously booked Russian cargoes continue to arrive at Turkish ports, the volume of fresh orders is expected to slow if demand for long steel products remains unstable.
Russia maintained a strong position in the Turkish billet market during the first quarter of 2026, significantly increasing shipments compared to the same period last year and becoming the largest supplier. Nevertheless, the emergence of additional exporters and increased competition are making it more difficult to maintain pricing power.
Looking ahead, the Russian billet market is expected to remain under pressure. Weak construction activity, uncertain export demand, high financing costs, and ongoing geopolitical risks continue to weigh on sentiment. Unless downstream steel consumption improves, billet prices may face further corrections in the coming weeks.
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