With the sluggish longs markets and falling scrap prices, the US billet market has followed a downward trend in recent weeks.
Longs producers have a decent amount of billet supply, while they continue to see demand is soft for their product. Therefore, they are not interested in looking to buy much billet tonnage now. US billet prices have also reflected some of the drop in US shredded scrap prices. US shredded scrap prices have decreased approximately $30 to $35/long ton ($29.53 to $34.45/mt) in October, and US billet prices have dropped by about $20/nt ($22/mt) in the last couple weeks. Currently, domestic billet prices are in the range of $375 to $385 /nt ($413 to $424/mt). As US scrap prices are anticipated to go down further in November, it is possible that the US billet prices may see further softening next month as well.
With the stagnant economic and sluggish steel industry, this month’s billet price decrease is not expected to create a lot billet transactions while longs prices are still declining. Market sources expect that the US billet market would stay more or less stable at the current level for the rest of this year.
Meanwhile, international billet prices have also decreased approximately $20 to $30 /mt from two weeks ago, due to the weakening finished product market and the softening scrap market. CIS producers are offering billet at $410 to $415 /mt FOB CIS, and lower prices can be found from traders at $390 to $400 /mt FOB. Turkish billet exports have been in the range of $435 to $440/mt FOB, while Mexico is offering billet at $525/mt delivered to Texas.
The total amount of billet imports into the US in September 2009 was 12,466 mt, representing an increase of 3,474 mt from August. The main countries that exported billet to the US during September were: Mexico, at 5,122 mt; Brazil, at 4,735 mt; and Canada, at 2,428 mt. Other countries that also exported billet to the US in a smaller amount during the period were United Kingdom, Japan and China.
On the export side, the latest data from the United States International Trade Commission (USITC) show that the total amount of US carbon billet tonnage exported in August 2009 was 5,358 mt, which represents an increase of 1,741 mt from July.
The main US carbon billet export destinations in August 2009 were: Taiwan, at 3,642 mt; Mexico, at 974 mt; and Canada, at 657 mt. Other countries that received negligible amounts of US carbon billet during the period include Dominican Republic, Bermuda and Philippines.