Global View on Billet: Downtrend resumes in Asia, some improvement seen only in Turkey

Despite expectations, the Asian billet market has softened this week due to the decline in futures and weak demand. In general, there have been poor market sentiments globally and some improvement has been seen only in Turkey amid rising scrap quotations.

The ex-China reference billet price of SteelOrbis has been corrected down by $2.5/mt on average to $435-440/mt FOB. Most offers seen last week at $445/mt FOB are at $440/mt FOB at the moment and to sign a deal additional small discounts are possible, according to market sources. Local steel demand in China is still lagging behind in China in February and higher inventory is depressing the prices.

The leading Indonesian producer has announced a small decline in billet export offers two times this week. The latest billet offers for April shipment, announced by the mill on Friday, stand at $438/mt FOB, down by $7/mt over the week. No new deals have been reported so far, but market sources said that earlier a small volume was booked at $435/mt FOB.

Higher prices in Southeast Asia’s import billet market have failed to sustain in February as major buyers have all been insisting on lower prices, and so the bid-offer gap has been too high for any deals to emerge. Even trading for sanctioned Iranian and Russian billet has halted this week due to high prices. Rumors about sales of ex-China 3SP billet to the Philippines at $460/mt CFR have been strongly denied by most market sources, with local importers saying that, even for 5SP, this price is unworkable. A deal at such a level has been possible only to Sri Lanka, a few traders commented. At the same time, the current offers for 5SP billet of Asian origins for late March shipment have been reported at $455-465/mt CFR Manila, moving down from $460-470/mt CFR last week. Offers for 3SP billets have been heard at $455/mt CFR Thailand and Indonesia with small discounts possible, but bids are at $440/mt CFR. A Russian mill has increased billet offers from the Far East ports of Russia to $458/mt CFR Taiwan, up by $10/mt from the deal reported last week. Also, to Thailand ex-Russia offers are at $455/mt CFR.

Turkey’s Kardemir has opened new billet sales in its domestic market, raising its offers as expected. Moreover, buyers have found the offers quite attractive and have booked a large volume of billet overall. Integrated producer Kardemir has announced billet prices at $490/mt for S2356JR grade and $500/mt for B420, both on ex-works basis, up by $5-10/mt from late January. The producer has managed to sell over 55,000 mt of billet since domestic customers have revealed decent interest in restocking. In addition, in the Iskenderun region, a producer has sold a total of 7,000 mt of billets to re-rollers at $520/mt ex-works. Earlier in the week, another mill in the region had managed to sell billet at $510-515/mt ex-works.

In addition, since last week, Turkish longs producers have booked a total of around 75,000-80,000 mt of billet from Malaysia at the average price of $485/mt CFR with some deals closed slightly below and above this level. Part of the volume, according to sources, is for end-of-March shipments, while some lots are for end of February-early March shipments. Less interest has been seen in prices from China and Indonesia this week, while both origins are on offer at around $473-475/mt CFR for April shipments.

No firm offers from Russia or Donbass have been reported this week in the Turkish market, while some sources assume the indications should be closer to $450/mt CFR Turkey at present. Exporters particularly in Russia have been facing some serious issues with the Russian railroads, i.e., higher prices, congestion and transportation delays. In addition, the firmer exchange rate of the rouble has been making exports less attractive recently. The SteelOrbis reference price for ex-Russia Black Sea billet has been at $430/mt FOB today, inching up by $5/mt over the past week.

The SteelOrbis Indian billet export reference price is unchanged at $440-460/mt FOB even as government mills have remained completely absent from exports, while most private mills are not submitting offers, perceiving the current workable price of around $440/mt FOB as being unviable to sellers. Indian mills’ offtake of semis is increasing and getting reflected in local billet prices.