Global View on Billet: Mood remains positive, activity eases ahead of further price movements

Sentiment in the global billet market has remained positive this week, with prices posting rises in almost all destinations, even though overall trading has eased a bit as both sellers and buyers have been assessing the likely future price movements.  

The SteelOrbis reference price for ex-Russia billet has settled at $500/mt FOB Black Sea, up $7.5/mt over the past week. A deal for 10,000 mt of ex-Donbass billet is reported to have been done to Turkey at $525/mt CFR for end-of-December shipment, translating to $495-500/mt FOB. Another contract has been rumored at $520/mt CFR to Turkey, but a few market sources confirmed that the contract is not so new, with most new offers for December and January shipment ex-Russia and ex-Donbass billets at $525-530/mt CFR. Tradable prices for prompt shipment Russian billet (excluded from the reference price) are at $517-518/mt CFR this week. Russian suppliers are also targeting higher prices in Egypt, with offers up to $540/mt CFR. But some traders may still offer at $525/mt CFR for unknown origins, though most believe that this is ex-Donbass or ex-Russia billet purchased by the traders earlier.

In Turkey’s import billet market, prices have been on the rise for non-CIS origin materials. In particular, ex-Algeria billet has changed hands at $535/mt CFR, while new negotiations have been held at up to $550/mt CFR for non-CIS material. Ex-Asia billet offers for January shipment to Turkey are equivalent to $555-560/mt CFR, while traders who have positions for December may offer at around $550/mt CFR and some mills may consider buying duty-free material from Malaysia if the market remains positive. NEW LINK FROM TODAY  

Offer prices for ex-ASEAN billet have remained at the same high levels announced by mills last week, at $520-525/mt FOB. The main support is coming from the Chinese market, which has continued to improve gradually. At the same time, ASEAN mills are nearly sold out for December shipment, even though some of the latest deals have been done with certain discounts, In particular, the last deals for December shipment from an Indonesian mill have been reported at $510-513/mt FOB for both 3SP and 5SP. The previous contracts for ex-Indonesia billet were reported by SteelOrbis at $512-517/mt FOB last week.

The reference price for ex-China 3SP billet has settled at $525-530/mt FOB, up by $7.5/mt compared to late last week, while some offers have been heard at even as high as $540/mt FOB. Allocation is limited with mills focusing on the local market.  

Trading activity in the Southeast Asian billet market has revived recently, but the buyers have been focusing on buying cheaper IF materials. One lot of at least 10,000 mt of Malaysian 5SP IF billet has been traded to the Philippines at $518/mt CFR. Usually, IF billet is priced up to $10/mt lower than EAF/BOF material, so this signals that the tradable level for 5SP EAF/BOF billet has already reached $528-530/mt CFR Manila. Another deal for ex-Thailand 3SP IF has been closed at near $505/mt CFR, but the low price is because this is material from stock, which has been offered in the market over a quite a long time. Offers for ex-ASEAN EAF/BOF billets have been coming to the Philippines at $530-535/mt CFR at the lowest, where the lower end represents some ex-Vietnam offers.

Square billet prices from Iran have remained relatively stable as compared to earlier this week, while sales are moving slowly and some small discounts have been seen in some deals. New tonnages have been sold to traders and it will most probably be directed to buyers in the GCC. However, some negotiations in Asia and the Mediterranean region are also continuing. According to sources, a 10,000 mt billet lot for December shipment has been booked at $465/mt FOB, while a previous similar lot, from another producer, was traded at $462/mt FOB. Also, there has been a rumor in the market about another 10,000 mt sold at $464/mt FOB. The first-tier mills are still expected to be able to achieve sales at close to $465-470/mt FOB.

The mood in the ex-India billet market has improved significantly with more sellers becoming active. The highest workable level has been at $520-528/mt FOB, higher than the reference prices of $500-515/mt FOB a week ago. The overall improvement in ex-India trade conditions has been reflected in a government mill closing an export tender for a smaller tonnage of 15,000 mt at the highest bid received at $524/mt FOB, but for 90 mm billets. This week, RINL has opened another export tender for 30,000 mt of 150 mm billet for shipment by January 10. The targeted level is $520-530/mt FOB.

* - latest deal prices