Global View on Billet: business slows down in most regions, suppliers mainly positive for early January

By the end of the current week, which is also the end of the year 2022, the business activity in the global square billet market has diminished. Both buyers and sellers have mostly stepped back from active negotiations. Many customers had restocked earlier and are in no rush to conclude new purchases. As for suppliers, many believe that early 2023 will be positive in terms of demand and prices and so they plan to return to the market next week or in around 10 days. In addition, the overall billet market allocation nowadays is limited and some global sellers have started offering for March production, targeting higher prices.

In particular, in Asia the offers from Indonesia have increased by $10/mt to $580/mt CFR or around $555/mt FOB, which is considered to be on the higher side. In fact, Vietnam has recently sold 40,000 mt of BF 5SP billet at $540/mt FOB, with no final destination known yet. The estimated price for the Southeast Asian markets stands at $565/mt CFR, which is in line with the workable level this week. The market range for billet is at $560-565/mt CFR Southeast Asia and a 10,000 mt lot of ex-Indonesia 5SP billet has been booked from a trader at $568/mt CFR Manila. Earlier this week, another billet cargo from Indonesia was booked at $560-567/mt CFR. The reference price for imported billet in Southeast Asia has increased by $5/mt on the lower end and by $2/mt on the upper end over the past week to $560-567/mt CFR.

Ex-Russia billet trade, which has been rather weak within the past couple of weeks, has almost come to a standstill by the end of the current year. One reason is that the allocation is rather limited, while another reason is that some suppliers prefer to restart trading after the holiday, counting on firmer billet prices. The latest deals were closed to Turkey at $550/mt CFR Aliaga for 5,000 mt, versus $559/mt CFR in initial offers. The workable price level is estimated at around $550-555/mt CFR at the end of the current week, while ex-Russia have been rare, being reported at various levels - from $560-565/mt CFR to $570-575/mt CFR and above. “People are just fishing. There is no real business now,” a trader said. 

Aside from Russia, Turkey has been receiving offers from Algeria at $570-577/mt CFR, down around $10-17/mt over the past week. Malaysian offers have been reported at $580-585/mt CFR, while Indonesia is offering at $590/mt CFR. The latest deals for non-Russian origin were closed last week - for 25,000 mt of Qatari origin at $560/mt CFR Aliaga. Domestic prices for billet in Turkey have lately been transacted at $600-605/mt ex-works for Kardemir’s billet, while, later, given the firmness of import scrap prices, the indicative offers climbed to $620/mt ex-works and above, specifically in the Iskenderun region.

Although Iranian billet producers remain quite bullish towards future sales, ex-Iran export trading has been more or less at a standstill this week. Specifically, after a sale at $475/mt FOB done a week ago by a major Iranian mill, no firm offers and no deals have been seen. With the Iranian government having imposed strict measures on gas consumption, local producers have been reluctant to engage in any negotiations. Meanwhile, some sources in the GCC region have reported that ex-Iran steel billet offers have risen up to $550/mt CFR from the levels valid a week ago at $510-515/mt CFR. However, following a sale at $492/mt CFR to the GCC region, there have been no confirmed deals. On balance, the SteelOrbis reference for ex-Iran steel billet has remained unchanged compared to the previous week’s levels, at $475-480/mt FOB BIK.

With the gap between offers and bids having widened further, the number of spot deals concluded for ex-India billet has apparently dwindled down to almost nothing. Accordingly, while most ex-India billet prices have remained at $500-520/mt FOB, some sellers have started to test the market with offers at $530-540/mt FOB. Customers, in their turn, are trying to push prices down by voicing counterbids at $475-480/mt FOB, down $5-10/mt from the levels a week ago.