Global View on Billet: Prices fall rapidly in Turkey, but fluctuate in limited range in Asia

Negative sentiments have been still prevailing in the global billet market this week, but prices changes have been uneven depending on the region. In Turkey, local prices have posted the biggest slump this week and ex-Russia billet offers and deals have also posted sharp drop, but in Asia most prices have been relatively stable as after some weakening in China early this week, futures have been on the rise, which has supported sentiments in this region. 

The billet prices in Turkish market have continued sinking this week, despite that the offered allocation has been not large overall, particularly from Russia and Donbas. Earlier this week local Kardemir has dropped its domestic prices by $40/mt to $525-530/mt ex-works, and this has had a toll on the billet market situation overall. The rare offers from other domestic producers have fallen to $540-550/mt ex-works with some exceptions in the Izmir region.

- In the import segment, the prices have gone below $500/mt CFR for Russian and Donbas cargoes versus $503-510/mt CFR workable levels, seen at the end of the past week. In fact, this week there have been talks about deals at $493-495/mt CFR levels while offers later on declined to $490/mt CFR, which has been considered as a “good price to sell” by some of the suppliers. By the end of the week there has been an information about a $480/mt CFR sale, which was not a surprise to many players in the market. However, some of the sources consider these low sales to be made as a compensation for the much higher priced booked cargoes, which are under loading now. Still, the SteelOrbis daily reference price for ex-Russia billet has settled at $450-470/mt FOB, down by $22.5/mt on average over the week. The Asian cargoes have been still available in the market at $535-540/mt CFR levels throughout the week and $530/mt CFR levels were considered possible. However, as the price gap with ex-Russia prices has widened, the upper end of the CFR price range for Turkey has been indicatively settled at $515/mt CFR.  

- At the same time, official offers and tradable levels for ex-ASEAN billets from mills have remained relatively stable after drop seen over the past two weeks. The official offers for ex-Indonesia billet have been at $505/mt FOB, which is in line with the latest deals on average. Previous offer price was at $510/mt FOB two weeks ago, then early last week there was a deal to Vietnam at this level, which was the highest lately. Also last week a few contracts at $500/mt FOB or just slightly above were done for the Philippines and Indonesia and this week at least one deal has been signed at the same level to a trader.  

- Ex-China billet prices have softened early this week and then rebounded later owing to rises seen in the futures market. The reference price level has been at $500/mt FOB on average on Monday, down by $10/mt since last week. Though the official offers from China were at $505/mt FOB, similar to ex-Indonesia prices, most market sources said that Chinese traders started to be more active in providing a bit lower level with $500/mt FOB could easily be found. On Friday, the reference price has been settled at $505/mt FOB, up by $5/mt from early this week, but still $5/mt below the average of last week. The local Chinese billet price has been stable since last Friday, so the import reference price has remained at $435-440/mt CFR.  

- The SE Asian import billet market has continued to be slow this week and prices have failed to move in any direction as lower position offers in earlier this week have either remained the same or increased later this week amid some improvement seen in futures. The SteelOrbis reference price for imported billet in SE Asia has been settled at $518-520/mt CFR by the end of the week, slightly up from $515-520/mt CFR reported on Tuesday, and relatively stable with very small decline compared to $520/mt CFR last week. The lowest offers seen in the Philippines have been still for 5SP IF billet – at $513/mt CFR Manila versus $515/mt CFR last week. Offers for ex-ASEAN and ex-China EAF/BOF billet have been in the range of $515-530/mt CFR Manila.  

- In Iran, the mills have returned to the export trading, although have been finding it hard to attract a customer due to the global lull in the billet trading and decreasing prices in some of the regions. One of the producers has closed a 30,000 mt billet tender at $483/mt FOB, which is $10/mt below its own latest sale, closed earlier in July. The cargo will be shipped in the middle of August. In addition, according to sources, another two producers have sold smaller lots at around $480/mt FOB. The traders who purchased these cargoes are expected to most probably trade them later to the GCC region, since the prices over there might be workable. The latest levels are at around $510/mt CFR Jebel Ali with $20-25/mt estimated freight. 

- Ex-India billet prices were relatively stable over the past week after early month price drops, but sellers led by government mills returned with more offers and new deals emerged. Ex-India billet reference price has remained at $500-510/mt FOB this week. Despite low realizations, there were more sellers present in the market with a government-led mill floating new export tenders for 30,000 mt and 15,00 mt of prime concast billet and slated to close next week. Some sources believe that the state-owned mill will target $520/mt FOB in its new tender. A private mill reported a modest volume trade for 15,000 mt for the Middle East at $505/mt FOB and another sale to an Asian trader for 20,000 mt at $510/mt FOB, sources said. In the local market, billet trade price lost INR 2,300-2,600/mt ($28-31/mt) over the week.