Global View on Billet: Only small changes in prices, but obvious improvement in trades

The global billet market has posted an increase in trading since last week, with most major destinations like Turkey, Asia and Latin America involved. The price trend has been uneven as some markets like Turkey have seen slight rises, while the previous bullish mood in Asia is unlikely to lead to higher deal prices.  

Turkey’s billet market has been quite active in terms of import restocking, with mills in particular showing strong interest in non-toxic origins. One reason for the strong demand is the necessity to restock while prices for Asian billets have decreased to acceptable levels, having been quite high previously. In addition, import scrap prices are not yet showing any certain signs of the downturn and are fluctuating in a narrow range. In addition, the high semis production costs of Turkish mills has urged them to pay greater attention to import offers. As a result, at least 80,000 mt of Algerian billet have been sold this week to Turkey’s Izmir region at $557-560/mt CFR for shipments at the end of February and in March. Some of the offers for the same material have now been reported at $560-565/mt CFR. In addition, previously, around 50,000 mt had been booked from Indonesia at around $560/mt CFR or slightly above, while 30,000 mt of Malaysian origin had changed hands at $565/mt CFR. The most recent offers for Asian billets in Turkey have been reported at $559-565/mt CFR which, however, does not quite match the mills’ official FOB-based targets. The indications for ex-Saudi Arabia billet have been voiced this week at $560/mt CFR, with no takers heard so far. Offers from Russia and Donbass have been mainly reported at $550/mt CFR for February shipments, with some $5/mt discounts considered possible. In the domestic billet market in Turkey, trade has been silent and prices have remained at $580-590/mt ex-works and up to $595/mt ex-works in some cases.

Algerian Qatari Steel (AQS) has traded at least 120,000 mt for export lately, although the tonnage may have been larger. Around 50,000 mt is reported to have been sold through a company subsidiary, while also up to 80,000 mt of Algerian billet has been traded to Turkey (including some older positions of traders for earlier shipment), while the rest of the volume has been distributed between international traders. Market players assume AQS closed most of the deals at around $530/mt FOB. Along with Turkey, sources expect Algerian billet to be offered to Europe and Egypt.  

The SteelOrbis reference price for ex-Black Sea billet has inched up by $3/mt over the past week to $515-520/mt FOB. Increased competition and the absence of new deals for ex-Russia billet have been the main reasons for the stabilization of prices. A few traders selling Russian billet said that offers are at $515-525/mt FOB at the lowest, but the real market is still at $510-515/mt FOB maximum. The recent tradable level in Egypt’s import billet market has been assessed at $550/mt CFR at the highest for commercial grade billet. Though this level is higher than the latest deals for ex-CIS billet from traders with a short lead time at $540-545/mt CFR last week, buyers have been refusing to accept a big increase in prices for now.

Ex-Indonesia 3SP billet offers for March shipment have been at $545/mt FOB since last Friday, up by $10-15/mt week on week. But the latest deals from Dexin Steel have been at $529-535/mt FOB, only a few dollars above $527-533/mt FOB reported last week. The Latin American market has been one of the active markets recently, while the highest price level has been fixed in deals to Africa, at $532-535/mt FOB. Meanwhile, a deal for 50,000 mt of Indonesian billet has also been at $530/mt FOB to Turkey. In Asia, a few deals were concluded to South Korea. Market sources believe that in total the Indonesian mill has traded all February shipment allocation of billet over the past two weeks, which is assessed at not less than 200,000 mt. Also, one deal for 30,000 mt of ex-Malaysia February shipment billet (non-IF) has been done at $530/mt FOB, with the final buyer being a Turkish mill or the Latin American market, while one more offer to Turkey has been heard at $565/mt CFR, which translates to similar FOB prices.

The Southeast Asian billet market has posted some softening this week, as confirmed in a few IF billet deals. Around 20,000 mt of ex-Malaysia 5SP billet have been traded to the Philippines at an average of $527/mt CFR. Moreover, another trade for 20,000 mt of 3SP billet also from an IF-based producer has been done at $520/mt CFR Manila. These IF billet sales have cooled down the previous positive sentiments in the market and the tradable level for BF billet is assessed now at not above $537/mt CFR, versus the previous deal at $542/mt CFR. A deal for 20,000 mt of billet from Russia’s Far East region has been signed at $525/mt CFR to Taiwan recently, with the level below that targeted by the mill earlier at $530-535/mt CFR.   

In Iran, billet market activity has remained rather slow for exports, with a couple of tenders reported to have been opened this week. In particular, Chadormalu Mining and Industrial Company has announced it wants to sell 30,000 mt of 5SP/3SP billet for mid-March delivery with the tender valid until January 23. In addition, there has been talk that Arfa Iron and Steel has traded a billet lot at $497/mt FOB, but most Iranian market players assume the information is either exaggerated or that the price includes quite high extras. In the meantime, ex-Iran offers to Egypt have been heard at $540/mt CFR and at $520-525/mt CFR to the GCC. In Asia, the latest offers from Iran have been set at $520-525/mt CFR to both Indonesia and Thailand, while the buyers from in Thailand are mainly bidding at $500-510/mt CFR, signaling weaker opportunities for Iranian suppliers to sell in the Southeast Asian market.

Indian private sector mills are reported to be submitting billet offers and disclosing deals in the range of $510-515/mt FOB, down by $5-10/mt over the past week. One spot trade for 30,000 mt for delivery to the UAE has been rumored at $510-515/mt FOB, while another western India-based integrated mill has concluded a trade for 25,000 mt to Egypt at around $515/mt FOB. Another eastern India-based mill reported a trade for 30,000 mt with a Hong Kong-based trading firm for onward sale at $510/mt FOB. This price translates to $535-540/mt CFR in the Southeast Asian market, in line with the latest tradable level for BF billets in the region.

* - deal prices from Indonesia and Malaysia were at $529-535/mt FOB