Global View on Billet: Market looks for clear trend as rises in China not sustained

The mood in the global billet market has been rather weak this week as the price rises and some optimism seen in China last week have not been sustained. However, it is unclear if the price declines will continue next week and, in most markets, players are waiting for more price drivers.

The ex-China reference price for 3SP billet has settled at $435-445/mt FOB, down $10/mt since last Friday. Most offers have been at $440-445/mt FOB, but deals are limited as buyers believe they can get some additional discounts. The main impact on sentiment has been from the acceleration of protectionism against Chinese steel. Just since late last week, two major importers of Chinese steel have announced AD duties. South Korea has imposed provisional AD duties on thick steel plates from China at 27.91-38.02 percent and Vietnam has announced preliminary antidumping duty on hot rolled steel products from China at 19.38-27.83 percent, effective as of March 7. Also, some declines in iron ore and local coke prices this week have given proof of the negative sentiment in China.

Even the rumors which emerged about China planning to cut crude steel production in the 2025-2027 period has failed to bolster the weak market. According to market reports, China is going to cut its steel production by 50 million mt in 2025, by 20 million mt in 2026, and by 10 million mt in 2027. The rumors also indicated that Li Qiang, a member of the Standing Committee of the Political Bureau of the CPC Central Committee, is going to sign and formally issue the document next week. In 2024, China’s output of crude steel totaled 1.00509 billion mt, decreasing by 1.7 percent or 17.38 million mt from 2023, according to the NBS. So, the rumor about a 50 million mt reduction this year, if true, points to a far more significant year-on-year drop. Nevertheless, there has not been any confirmation of these rumors even in the local Chinese media.

The leading Indonesian mill has voiced its new billet offer for May shipment at $450/mt FOB, increasing it by $5/mt from Thursday last week, but stable compared to the level seen early this week. Previous deals for April shipment billets were done at $440-445/mt FOB, sources said, so up slightly from contracts reported last week for the same shipment period at $433/mt FOB, $438/mt FOB and $440/mt FOB. Though some small quantity of April shipment billet from the Indonesian mill may still be available, the majority of order books for April are closed, making this product the most popular and sought-after in the mill’s portfolio at present.

Southeast Asia’s import billet market has remained weak as trading has been close to zero after some Asian mills attempted to increase prices or held them stable at relatively high levels. Most offers for ex-Asia 5SP billets have been heard to the Philippines at $460-470/mt CFR and there were no new deals after $455/mt CFR. Active negotiations have been held in Indonesia and Thailand only for ex-Iran billet. There has also been talk that ex-Iran 5SP billets have been offered to Indonesia at $450/mt CFR and around $445-450/mt CFR will be fixed shortly or will already have been done by some source.

Iranian billet suppliers have been seeing rather low demand for their products abroad, given the instability of pricing globally, the expectations of Chinese announcements, and the hesitation of buyers in the main consuming destinations. Esfahan Steel Company has opened an export tender for 30,000 mt of billet, with the price expected to be around $410/mt FOB. However, in general, according to market players’ evaluations, the workable price for ex-Iran billet, including second-tier mills, is at $400-410/mt FOB, versus the latest deals closed a while back at $415-420/mt FOB. In Asia, ex-Iran billet is on offer at $450/mt CFR for 5SP grade, while slightly lower levels are considered workable versus buyers’ latest bids at $440/mt CFR. In the GCC, Iran’s offers to Oman and the UAE are at $435-445/mt CFR with no large deals reported.

In Turkey, integrated steelmaker Kardemir has announced a $5/mt decrease in its domestic billet price, which is considered a strategic decision against imports from the Black Sea, mainly from Russia and Donbass, the occupied Ukrainian territory. The producer has offered billet at $485/mt and $495/mt ex-works for S235JR and B420 grades, respectively, and has managed to sell up to 60,000 mt of billet over a short period. Other suppliers in the Turkish domestic market, particularly in the Iskenderun region, have been offering at $520-530/mt ex-works, but the workable level is closer to the lower end of the range.

In Turkey’s import billet segment, Indonesian and Chinese billet prices have increased from $475-478/mt CFR to an indicative $485/mt CFR for April shipments, while sources believe that $470-475/mt CFR levels could be workable against the current scrap levels. Malaysian billet offers have been at closer to $490/mt CFR, again for April shipments, with no active interest seen yet.

In the Black Sea region, ex-Russia billet prices have been sustained at $434-440/mt FOB with a rumour about a 25,000 mt sale at $455/mt CFR, which has not been fully confirmed by the time of publication. Many suppliers report their offers are more or less on hold currently due to the unfavourable exchange rate and persisting issues with internal railroad transportation. In addition, Kardemir’s price cut and its sizeable sales to Turkish customers have put pressure on the workable prices for Russian billet, which are now evaluated by the customers at closer to $450-455/mt CFR for small lots with a short lead time.

Ex-India billet prices have continued to remain under pressure as some positive sentiments early in the week have not been sustained, but a few local sellers have been able to keep trading active for small volumes at lower prices amid pre-Ramadan restocking in the Middle East. While ex-India billet offers are unchanged at $430-450/mt FOB, small-volume deals in the Middle East have been reported at the lower end of the range as the buyers have only been looking at pre-holiday “emergency restocking”. This included a trade for 20,000 mt by an eastern India-based mill at $433/mt FOB, while another producer concluded a deal for supply of 15,000 mt at $425/mt FOB to an undisclosed destination.