Global View on Billet: Deals signed only at discounts despite Asian sellers’ hike attempts

Asian billet exporters, led by Chinese and ASEAN mills, have still been insisting on the higher prices announced since late last week. But trading at higher levels has halted and deals in both the Asian and MENA markets have only been done at discounts.

The leading Indonesian producer announced its billet offers at $445/mt FOB late last week, but it has corrected them down to $443/mt FOB by the end of this week. And what is more important, the new offers are for April shipment, which for March shipment market sources said buyers may still achieve $440/mt FOB or slightly lower. The latest deal for at least 20,000 mt of billet was done at $437/mt FOB last week, for March shipment. The reference price for ex-China billet has remained stable at $435-445/mt FOB since last Friday, with the official offers at the higher end of the range. The price is indicative for now as trading is at a standstill ahead of the week-long holiday.

Iranian billet exporters have managed to close deals for substantial volumes, following a rather long period of silence. However, in order to attract buyers, they had to decrease prices to the levels workable in the current global market. As a result, according to sources, up to 130,000 mt of billet have been recently sold by three main Iranian producers in the range of $418-425/mt FOB. These volumes are most likely to be directed to the GCC region, where the estimated levels of $440-455/mt CFR are quite acceptable. In Asia, the most recent offers have been reported at $450/mt CFR, which is also quite competitive. According to Iranian market players, mills have been able to decrease their export prices from $435-440/mt FOB levels to the mentioned range owing to the depreciation of the rial and the government’s recently imposed regulation of currency exchange rates for exporting companies.

Offer prices for import billet in Southeast Asia have increased this week, following the rebounding trend in the local Chinese market ahead of the upcoming week-long holiday. Trading has been limited, but Iranian and some ASEAN origins have become the most competitive. The latest Asian offers for 5SP to the Philippines were at $460-470/mt CFR. Most buyers have been absent from the market after purchases at $445-450/mt CFR earlier in the month. However, some said that small volumes could be traded at $460/mt CFR (mainly for ASEAN origins), if someone needs material and wants to sign a deal this week. But the majority of the price ideas of customers are still at $450/mt CFR. In Thailand and Indonesia, offers for 3SP Asian origin billets have increased by $5/mt over the past week to $460/mt CFR. But this level has been totally unworkable. Moreover, market sources said that Iranian billets have become more competitive after many months. Offers from Iran to Indonesia for 3SP have been at $450/mt CFR and small discounts have been possible.

Following the price hike attempts of Asian billet suppliers, major billet exporters based in Russia’s Far East region have also increased their offer prices, but with no success. The latest billet offers from Russia’s Far East region to Taiwan were at $440/mt CFR late last week and are up to $445-450/mt CFR at present, according to market sources. This is up from the previous deals at $430/mt CFR to Thailand and $435/mt CFR to Taiwan. Even though the current offers from Russia are among the most competitive, buyers are reluctant to purchase, as sanctioned Russian material cannot be traded in many countries even in Asia due to the bank restrictions imposed on Russia after it invaded Ukraine.

Billet trade has been rather slow in Turkey this week, particularly for Asian cargoes, for which prices and lead times have increased once again. Buyers do not find themselves in a position to purchase billet for May deliveries and have been focusing mainly on import scrap purchases. Locally, Kardemir has sold around 50,000 mt of billet at $480/mt for S235JR and $495/mt ex-works for B420 steel grade, having lowered its price by $10-15/mt since its previous sale. Chinese billet prices have increased by $5-10/mt over the past week to $475-480/mt CFR Turkey, while the same level is offered for Indonesian material for April production. Malaysian offers are indicative for now at $480-485/mt CFR, versus the latest deals at $470-475/mt CFR.

While Ukrainian mills prefer to stay out of the market for now, some Russian and Donbass material has been traded in small lots to Turkey and in larger volumes to Egypt. In Turkey, small lots were sold at $440/mt CFR, while some have reported the level of $437/mt CFR as well. In Egypt, large lots, according to sources, up to 70,000 mt, were sold through a trader at $470/mt CFR for billet with high manganese content. At the end of the current week, the SteelOrbis daily price assessment for ex-Russia billet has been set at $420-430/mt FOB, down by $5/mt over the past week.

Indian mills have continued to refrain from submitting billet export offers and, even though there was cautious optimism over slight improvements in some Asian destinations, it did not result in any narrowing of the bid-offer gap. The Indian billet export reference price has settled at $455-465/mt FOB, versus $440-460/mt FOB, but improved sentiments have not been sufficient for sellers to conclude deals as prices from other sellers - Asian and Iranian - have still been more attractive to buyers.