Although US billet prices have followed domestic scrap prices up in September, billet demand remains slow in the market.
Domestic billet prices have increased by approximately $28/mt to the level of $585 to $595/mt in September. The price rise is mainly attributed to the US shredded scrap price increase in the beginning of the month. With uncertain economy and sluggish US long products market, billet demand is still slow while supply is adequate in the domestic market. In addition, re-rollers have not bought a large amount of billet toward the fourth quarter and are trying to maintain their billet inventory at comfortable low levels. Furthermore, some market insiders project a decrease for the US scrap prices in October due to price adjustment and slow finished products market. Therefore, US billet prices may come down along with scrap next month.
Along with domestic prices, international billet prices continue to climb as well. Prices have increased by $10 to $20/mt from a month ago because of insufficient billet supply in Turkey, the Middle East and North Africa. Current Turkish billet is offering at $575 to $580/mt FOB and CIS billet is selling at $555 to $560/mt FOB.
According to the US Import Monitoring and Analysis System (SIMA), total billet imports into the US in August were 14,527 mt, reflecting a large decline of 10,619 mt from the previous month. The primary billet exporters to the US during the period were the NAFTA countries: Mexico, at 9,670 mt; and Canada, at 3,062 mt. United Kingdom, Brazil and Japan exported less than 1,000 mt of billet to the US during the period.
On the export side, the latest USITC data show that the total amount of US carbon billet exported in the month of July 2010 was 10,627 mt, which represent a significant decrease of 16,496 mt when compared to the figured in June. The primary country that imported US carbon billet in July was Taiwan, at 9,703 mt. Other countries that imported smaller amounts include Canada, Venezuela, India, Mexico, Ecuador, and Netherlands.