Global View on Billet: Buyers at major outlets restock as prices stable or slightly down

Though Asian billet export prices have not been posting big changes compared to last week, trading activity has improved, for both Chinese and ASEAN billets. This signals that a number of buyers (both in Southeast Asia and the MENA region) have been sharing stable expectations and have decided to replenish stocks. Also, Turkish buyers have been rather active in purchases in the local market, seeing big logistical challenges for Russian suppliers in Black Sea.

The SteelOrbis reference price for ex-China billet stands at $450-460/mt FOB, down by $5/mt on average from last week. A number of deals for a significant volume of over 50,000-60,000 mt in total of Chinese billet have been done to Southeast Asia and Africa at the abovementioned price levels. To SE Asia, deals have been at $455/mt FOB or so, but a sale of 30,000 mt of Chinese billet to the African market has been heard at $460/mt FOB.

In addition, a major Indonesian mill has sold 2-3 lots of 20,000-30,000 mt of billets each at around $460/mt FOB or just slightly below for September shipment, but all the volumes have been taken by traders, mainly for the Middle East market. The mill has started to offer the same price for October shipment, which is down by $5/mt from the level available from this producer last week.

A few deals for Chinese billets have been reported in the SE Asian import billet market after some additional discounts. This has been the result of very weak buying during July. One deal for Chinese 5SP has been heard at $480-482/mt CFR, while another was reported at $478/mt CFR, both to the Philippines and involving two major importers. There has also been some intra-ASEAN billet trading, with small volumes of ex-Vietnam and ex-Thailand billet under discussion at $450-455/mt FOB. Some offers for ex-Iran billet have been heard at $465/mt CFR, but mainly for material already on the water. In general, there have been fewer offers from Iran.

In Turkey, buyers have booked around 100,000 mt of billet from Kardemir, which announced $525/mt and $530/mt ex-works offers, up by $15/mt from previous sales. Considering rather slow business in the rebar segment, such a volume of bookings at a higher price was a bit of a surprise, but it is explained by fears of further restrictions on supply from Black Sea and Azov Sea ports due to the current war-related disruptions. Other local billet suppliers are offering at $535-540/mt ex-works in Iskenderun and $550-555/mt ex-works in the Izmir region.

Import offers from China were at $510-515/mt CFR early this week, but by the end of the week estimates went down by around $3-5/mt following a drop in futures. Still, these levels are not workable in Turkey, and few buyers would aim at $490-495/mt CFR for Chinese material. Ex-Malaysia offers have been reported at $520/mt CFR and, according to sources, a deal at around $515/mt CFR has been concluded for delivery to the Iskenderun region.

While shipping operations in the Azov and Black seas have been under a war-related threat, billet business to these destinations has diminished, at least for now. With shipowners largely refraining from going to these ports, and freight and insurance rates increasing, there have been hardly any firm offers from Russia. The latest deals for small lots were concluded at $495/mt CFR, sources report. Despite an increase of around $5/mt, the SteelOrbis daily reference price for ex-Russia billet has remained stable at $465-470/mt FOB due to the increase in freight rates to a minimum of $30/mt. Ex-Iran offers are currently rare, with some indications reported at $470-480/mt DAP for the Karabuk region.

Large Indian mills have maintained an active stance on billet exports over the past week, offering large volumes, and, while price realizations are stable, expectations of improvements in prices have not materialized. Ex-India billet prices are stable at $450-460/mt FOB, with BOF-based producers' materials still available at the higher end of the range. According to the sources, an export tender held by a government-run mill, which expired late last week, fetched the highest bid of $455-460/mt FOB, the same as in the previous auction. This week, two new tenders for the export market have been announced by RINL. One tender for 60,000 mt of 3SP/4SP 150 mm/200 mm billet for shipment by mid-August was opened on Monday. Another tender is for 30,000 mt of 5SP 150 mm billet for shipment by August 20. The high export allocations reflect weak domestic merchant sales.