Global View on Billet: Market divided between more positive Asia and weakness in Black Sea region

Friday, 26 November 2021 17:51:17 (GMT+3)   |   Istanbul
       

- The mood in the two major billet consuming billet markets - Asia, and Turkey and North Africa - has switched to the opposite of what was seen in the middle of November. In Asia, some improvements have been witnessed with the most aggressive stressed cargo offers gone and mills have resumed sales to Southeast Asia. At the same time, in the Black Sea export market sentiments have been easing with low trading seen to North Africa and Turkey, and no positive outlook for the near future.

- Demand for imported billet in Southeast Asia has improved over the past week and the price level in the market has not been as wide as earlier, as mills have reduced prices to attract customers, while low-priced offers for stressed cargoes by traders have almost gone. A number of deals for almost 100,000 mt of import billets have been done by mills to the Philippines and Taiwan at $640-650/mt CFR this week, which is up by $10/mt on average compared to the tradable level a week earlier. Moreover, after two stressed cargoes for 25,000 mt of billets in total were sold to Taiwan at $625/mt CFR (slightly higher than $618-620/mt CFR to Indonesia and Thailand last week), there have been almost no such low prices heard in the market. It seems the volumes that have been redirected from China by traders are almost sold out now. 

- Better sentiment has been seen in the Chinese billet market this week too amid rising futures prices, better demand for rebar, and higher costs. As a result, the tradable price level for imported material in China has also risen to $600/mt CFR (+/- $10/mt depending on the region), but the gap between offers and bids has remained fairly big, resulting in no activity. Most offers have been at $650-660/mt CFR and, even if some seller would be ready to provide $640-645/mt CFR, it is unlikely to trigger any interest. 

- Despite some decline seen in the local Indian billet market, Indian billet exporters have also been more optimistic, holding back deals anticipating a revival in the Asian market at higher prices. After the last trade at $600/mt FOB late last week and reports that diversions of cargoes to alternative destinations from China are easing, Indian exporters expect that prices will rebound and, as a result, they cancelled some recent tenders. The targeted prices by large BOF based mills are $610-620/mt FOB. 

- The recent cancellation of safeguard duties on billet imports by the government in Egypt has encouraged some traders to pay higher for ex-Iran billets. This has given temporary support to Iran-based billet mills, providing them with an opportunity to get orders at $590.5/mt FOB and $602/mt FOB, while targets were at $580-590/mt FOB last week. Suppliers are likely to resist any possible price declines in the coming weeks as they appear likely to face other challenges soon. Specifically, the Iranian government has notified local steel mills about certain gas supply limitations during the winter season in order to compensate for the gap between production and demand locally. 

- The billet market in Turkey has been under the negative impact of the severe lira rate drops against the US dollar and  buyers’ generally negative expectations. As a result, import deals from the CIS have been rare with one sale reported at $650/mt CFR while offers have been in a wide range of $650-675/mt CFR depending on the seller, origin and shipment terms. Still, some of the mills reported that levels close to the upper end of the range are achievable under negotiations with some buyers. In the domestic market in Turkey, trade has been seen only in the northern part of the country where Kardemir managed to close over 40,000 mt of billet deals at $688-693/mt ex-works. In other regions of the country, the rare offers have been standing at $690-700/mt ex-works with no deals heard. 

- The SteelOrbis reference price for ex-CIS billet has been cut by $22.5/mt on average this week to $610-615/mt FOB with the midpoint at $612.5/mt FOB. A deal for 50,000 mt of ex-Ukraine billet has been reported as done to Latin America at around this level, moreover, some rare deals to Turkey and North Africa have also been heard at $610-615/mt FOB. Egyptian customers have slowed down bookings after a lot of deals last week and sellers are watching now. The supply in the Black Sea export market is lower now, at least on the traders’ side, according to sources, but more activity is expected from Russian mills next week as they will negotiate January shipment billets with the 15 percent export tax lifted and substituted by 2.7 percent excise tax, to be valid from the January 1, 2022. 

Market

Price

Weekly change

CIS exports

$610-615/mt FOB

-$22.5/mt

China imports

$600/mt CFR

+$15/mt

SE Asia imports

$640-650/mt CFR

+$10/mt

India exports

$600/mt FOB

+$5/mt

Iran exports

$590-602/mt FOB

+$11/mt

Turkey local

$685-695/mt ex-works

-$7.5/mt

Turkey imports

$650-675/mt CFR

-$10/mt

Turkey exports

$685-700/mt FOB

stable


Tags: Billet Semis Europe 

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