Global View on Billet: Bearish sentiments prevail in most outlets despite some sellers’ hike attempts

- Bearish sentiments have continued to prevail in most billet markets this week as customers have been exerting pressure, not being willing to sign deals without discounts. But at the same time, in some markets there have been some attempts by sellers to push up prices. Most market sources agree that billet prices are unlikely to resume an upward trend in the near future, but the declining pace is also likely to be small given the recent stabilization of scrap prices, and billet price declines will differ from market to market.

- This week, ex-Russia billet prices have posted a visible decline of around $15/mt on average due to the very limited number of takers left who can purchase ex-Russia material and risk receiving cargoes from the Black Sea. Payment issues and problems connected with deliveries of products, including insurance, as well as reputational risks have been keeping most buyers away. The main demand for ex-Russia billet has come only from Turkey. Offers from Russia have fallen to $790/mt FOB Black Sea, down by $10-20/mt reported a week ago, while the deal price level already does not exceed $780/mt FOB by the end of the week. 

- The interest in Turkey in billet bookings from Russia was mainly due to the fact it is one of the cheapest materials currently available. According to sources, some of the Turkish mills were trying to replace their own billet exports at much higher prices by import billets and were buying at $820-830/mt CFR from Russia, mostly for cash-upon-delivery payments. Another reason that may have made import billet attractive is the aim to substitute the missing import scrap cargoes for May shipments. However, most market players agree this would not be very reasonable, given that the risk of non-performance from the Russian side is quite high. This week, around 20,000 were sold from Russia in a confirmed deal, while a lot of sources reported there might have been several more bookings. Local billet prices in Turkey are at $890-910/mt ex-works and slightly lower prices are heard for exports. Another point is that the Turkish mills who have both flats and longs production nowadays prefer to utilize their slab output to the maximum, and so they are in the market to purchase billets. However, local origin billet may be chosen as a non-risky alternative by many, SteelOrbis understands. 

- Demand for ex-Russia billets in Egypt has been slack this week as customers will not be able to open letters of credit. Ex-Russia billet prices are now at a big discount compared to billets of other origins in the region, but the payment issues caused trading to halt. The tradable level for ex-Asia billet in North Africa, in Egypt in particular, could be $870/mt CFR, while offers are still at around $900/mt CFR. In terms of Asian billets, suppliers from Indonesia and Vietnam are likely to remain active in offering, while Chinese sellers are likely to withdraw due to the emerging expectations of export duty.

- Chinese billet sellers have been cautious in offering to the export markets amid the possible introduction of export duty, while some of them have already announced higher prices from April 6, amid higher costs. During the Tomb Sweeping Holiday on April 4-5, offer prices remained stable, while they increased to $790-800/mt FOB afterwards, up about $20/mt amid the increase in raw material prices. Rumors said that China may implement an export tax to curb the export of billets, and this has also limited the number of offers from China. At the same time, the import market in China has remained silent as the tradable level is still $60-70/mt below the cheapest offers. 

- Billet trading in the Southeast Asian market has remained poor this week as customers have continued to wait for discounts. At the same time, major Asian suppliers have not been very flexible, expecting demand to return soon. After a deal for ex-Vietnam EAF billet reported at $815/mt CFR Manila last week, no bookings have been made. Cheaper prices for ex-Vietnam IF billet have been at $805/mt CFR, while those for ex-Thailand IF billet have been at $780/mt CFR, similar to the latest deal for IF material to the Philippines. Ex-Russia billets have been offered to the Philippines at $780-795/mt CFR, with no deals as the payment scheme is still being figured out. 

- Most demand in Southeast Asia has been seen for ex-Iran position billet lots offered by traders at discounts. Specifically, two cargoes, for 42,000 mt of ex-Iran billet, which were initially destined for China, were offered to Asia. In particular, one cargo for 20,000 mt was already booked to Thailand at $750/mt CFR, while an offer for another 22,000 mt is still valid, following the refusal of a buyer in Indonesia to book at $770/mt CFR. Another cargo for 30,000 mt of ex-Iran billet has been transacted, also to Thailand, at $760/mt CFR, for May shipment. 

- A bearish trend has set into the Indian billet export market too with buyers across major destinations pulling out from making trades. At the same time, offers from mills have also been limited as government-run mills have been working on already signed contracts against the backdrop of the fall in production during the strike at RINL until April 4. Ex-India billet prices are at $730-750/mt FOB, down by $20/mt over the past week, but they have still failed to attract much demand across the Asian and Middle Eastern regions. The tradable level is closer to the lower end of the range, according to sources.