Global View on Billet: Market ends year on stable note, but outlook for Jan mixed with optimism fading

The year is ending on a stable note in the global billet market. Offers have been mainly stable in the major sales destinations, though some Asian suppliers have dropped prices, which is signaling that the expectations for January are not that strong as usually ahead of the Chinese New Year. Nevertheless, part of market participants is still cautiously optimistic.

The SteelOrbis reference price for ex-China billet has remained at $440-450/mt FOB since late last week. A few traders have said that overall export activity has been slack as mills have not been very eager to sell, while buyers have also been mainly out of the market due to end-of-year considerations and holidays. On Monday, December 23, the authorities in Handan initiated a level II emergency response to weather with heavy atmospheric pollution, which will impact some steel mills’ production and will limit transportation by trucks. Among the supportive factors to the market has been the announcement of the Finance Ministry that it will focus on expansion of domestic demand in 2025 and will speed up fiscal expenditure as part of the new policy of the central government. There is talk that China is going to increase the issuance of special treasury bonds to as much as RMB 3 trillion ($411 billion) in 2025, from RMB 1 trillion this year.

However, some ASEAN mills have decided to provide discounts to sell off February shipment volumes ahead of Chinese New Year. The major Indonesian producer has managed to sell 30,000 mt of billet or slightly more according to some sources at $433/mt FOB to three major Asian traders this week. The price is down from the official offer announced at $445/mt FOB since late last week. Malaysian mills have not dropped official offers from the previous $455/mt FOB and as a result, there have been no active negotiations held lately.

In the Southeast Asian market, there have been offers at $460-465/mt CFR for 3SP and 5SP billet early this week, but buyers have been inactive. By the end of the week some traders have voiced $455/mt CFR for 3SP and $460/mt CFR for 5SP, but with no further reaction from buyers. Late last week, a deal for 5SP 150 mm billet in the Philippines was rumored at $462/mt CFR.

Import billet pricing has been relatively stable in Turkey this week with only some of the Asian suppliers having decreased their prices. However, Turkish mills find themselves not in a position to import in large volumes and prefer to insist on discounts. Offers from Indonesia have decreased from $490/mt to $470-475/mt CFR over the week, but the bids have been still at $5-10/mt below the levels. Malaysian billet has been offered at $490-495/mt CFR, while the workable levels for the re-rolling companies are considered at $483-485/mt CFR and slightly above for this week. Mills, however, are not willing to buy from Malaysia above $465-475/mt CFR. China has been kind of out of the game this week as its offers of $475-485/mt CFR are considered on the high side compared to other ex-Asia suppliers.

Ex-Russia billet is nowadays priced at $460-465/mt CFR in Turkey and, according to sources, small lots have been booked recently within the range. The previous deals for the large volumes from Russia were sold at $462-463/mt CFR, as SteelOrbis reported. Turkey’s interest in this origin is based on the low pricing, the possibility to book in small volumes and for a short lead time. The SteelOrbis daily reference price for ex-Russia billet has narrowed down from $441-447/mt FOB to $440-445/mt FOB, down by $1.5/mt over the week.

Iranian mills have a couple of export billet tenders afloat this week, the latest one has been announced by Khouzestan Steel Company for 20,000-50,000 mt with a deadline of December 27, 2024. The cargo readiness is in the first half of February. According to sources, the previously announced tender of Chadormalu Mining and Industrial Company, due on December 24, was not closed as the highest bid of $438/mt FOB was not accepted by the supplier. Ex-Iran weekly billet reference price has been indicatively revised downwards from $450-455/mt FOB to $440-450/mt FOB.

Ex-India billet offers from large mills were stable at $480-490/mt FOB but integrated mills were inactive amid backdrop of continued gains in local sales realizations and expectations of economic stimulus in China to start having positive impact on finished steel prices in 2025. Large government run integrated mills and predominant exporters of semis from the country continued to refrain from submitting offers or floating export tenders for more than two consecutive months, seeing some improvement in prices and sales in the local market. However, the tradable level for the Indian billet was stable at lower level of $460/mt FOB.