Global View on Billet: Attempts to increase prices were short-lived in most markets

A number of major billet exporters were attempting to increase prices last week, and some were following this trend even early this week. But slowdown in the global demand after some previous deals and pressure from the bearish scrap market have led to quick rollback in prices in some markets. While in those countries, where suppliers have been still attempting higher prices, buyers have stopped accepting them, waiting for lower tags soon.

The uptrend seen last week in the Southeast Asian billet market has continued this week. But after buyers accepted higher prices in deals late last week, this week they refuse to negotiate with any further increases. Moreover, after restocking, bids have mostly moved down. A few deals for ex-Indonesia and ex-Malaysia billets were signed at $550/mt CFR late last week. The total volume is said to have reached 50,000 mt of billets, mainly mixed 5SP and 3SP or 5SP grades. The previous deal prices for ex-Indonesia billet were at $537-548/mt CFR depending on the grade, as reported last week. Offers reached $560/mt CFR and higher early in the week, but went back to $550/mt CFR Manila again due to a lack of interest.

The attempts to push prices up have been seen in the export billet market in Iran. Iran-based steel mill managed to sell at $460/mt FOB BIK, as reported early this week, which is more or less in the line of prices targeted by other Iranian steel exporters and up $5-10/mt from the last week’s reference price. Moreover, another major Iranian mill was targeting $470/mt FOB BIK in its ongoing billet tender. The freight rate to the Gulf region is estimated at around $25/mt, while the freight to China assessed at around $35/mt.

However, by the end of the week ex-Iran billet prices have rolled back again. A producer was forced to accept $455/mt FOB BIK in a sale. News about the worldwide energy crisis brought some potential customers for Iranian billet, but higher prices cannot sustain.

Some slight increases have been seen in the local Chinese market this week. Following a short holiday, Chinese mills returned to the market on Tuesday, September 13 and the tradable level for imported billet has improved compared to last week, but for the majority of sellers prices in China are still not good enough. Moreover, after typhoon Muifa hit China and local prices declined in the second half of the week, the optimism at least for the near future has dried away. The most competitive offers from abroad could be found for ex-Iran and ex-Russia Far East billet to China at $500-505/mt CFR for October-November shipment. The SteelOrbis reference price has increased by $10/mt on average this week to $480-500/mt CFR, though bids have been not above the lower end of this range.

In the domestic market in Turkey, the number of billet offers is still scarce. Kardemir announced billet sales at $610-615/mt ex-works depending on the steel grade. Such a level was widely expected in the market but it did not become workable due to the pessimistic moods among buyers.

This week, there has been a clear price downtrend in the import billet segment of Turkey, largely triggered by the fall in deep sea scrap transaction levels. However, the price range for import billet has been wide this week, depending on the sellers, their market position, the cargo size, and the lead time. Early this week, the offers and indications for ex-Russia billet in Turkey were reported at $570-580/mt CFR from certain suppliers and around 20,000 mt were sold by one of them in 3,000 mt lots at $575-577/mt CFR to the Izmir region and to the Black Sea side. Many players in the market said that this level is too high, especially given that larger volumes were available at significantly lower levels at that time. By the middle of the week, some buyers in Izmir have reported $560/mt CFR offers for 5,000 mt, while 20,000-30,000 mt cargoes, according to sources, have been on offer at $540-550/mt CFR to the Marmara and Izmir regions.

By the end of the week, some relatively fresh import billet deals have been disclosed in the Turkish market, reflecting a lower workable price levels for the small lots for prompt shipments. Two buyers managed to insist on $552-555/mt CFR for a total of around 3,000 mt for ex-Donbas square billet with a short lead time. Also around 20,000 mt of billet ex-Russia have been rumoured as traded to the Izmir region at $524/mt CFR by a large mill, but this has not been confirmed as assessed as too low by most market participants.

The SteelOrbis reference price for ex-Russia billet has declined by $15/mt over the week to $505-515/mt FOB, versus the previous levels of $520-530/mt FOB Black Sea. Though the decline in CFR prices in Turkey has been bigger, the FOB level has been corrected at a slower pace, taking into account some reduction in freight rates, which have eased to an average of $35/mt to Turkey, versus the previous $40/mt.

Indian billet exports remained almost inactive even after sellers made minor adjustments to prices but buying interest in most key destinations remained at low levels. While private mills are largely staying away from submitting offers, the market is keeping a close watch on a 30,000 mt export tender from a government mill to assess new acceptable pricing. The sources said that while government mills are reported to be maintaining ex-India prices at $500-510/mt FOB, at least one private mill reported an offer in the range of $470-480/mt FOB but failed to conclude any deals. The reference price for ex-India billet has increased to $470-510/mt FOB compared to $460-490/mt FOB a week ago.