Global View on Billet: Market stabilizes at higher levels as demand improves gradually

Prices for billets have ranged from stable to slightly higher in the major outlets globally this week amid rather balanced conditions in Asia, firm scrap prices, and the lack of a pessimistic outlook up to the end of this month.

Asian billet prices have remained stable at high levels after the increases seen last week amid stable conditions in the local Chinese market, but buyers, especially traders, have been more willing to conclude deals, understanding that there will be no declines in the near future. Ex-China billet prices are at $440-450/mt FOB, up by $2.5/mt on average from last Friday. The lower end of the range corresponds to some deals (to Southeast Asia and the GCC) and prices in negotiations held this week, while official offers are at $445-450/mt FOB for 3SP and 5SP billets. The loose monetary policy in China with RRR cuts seen last week have supported the mood in China, while production of steel remained at rather stable levels. Though most market sources do not expect active restocking in January ahead of the Chinese New Year holiday, they do not expect any price correction during that time either.

The Indonesian mill has increased its billet offers by $5/mt to $455/mt FOB, while its slab price has risen by $10/mt to $465/mt FOB, both for April shipment.

In Southeast Asia, offers have remained high, and some deals have been reported at levels announced last week, but most importers have been quiet as they believe that a reversal of the previous upward trend may be seen. In the Philippines, offers for 5SP 150 mm billet have been at $460-475/mt CFR, while 130 mm billet is available starting from $465/mt CFR. Some buyers are still hoping to see $450-455/mt CFR as they have sufficient stocks for now. The lowest offers from traders for 5SP 150 mm billet have been at $458/mt CFR, but mainly from traders who have long positions. Small-tonnage deals for 3SP billet have been heard at $458-460/mt CFR in Thailand and Taiwan this week, but they could not be finally confirmed by the time of publication. A few sources from these countries said that this level is high for end-users, but “nothing below this could be found except from Russia”. There have been no firm offers for Iranian billets to Southeast Asia this week. Ex-Far East Russia offers have remained low at near $440-445/mt CFR Taiwan due to limited sales destinations due to sanctions.

In Turkey, local billet prices are mainly at $500-515/mt ex-works and above, relatively stable over the past week. In the Iskenderun region around 35,000-40,000 mt have been sold at $508-510/mt ex-works for March deliveries, while suppliers report there is some pressure from the buyers’ side due to weak demand and pricing for domestic rebar.

In the import segment, offers from China have this week varied at $475-482/mt CFR for March shipments, with no fresh deals reported. The indications from Malaysia and Indonesia have been evaluated at $505-510/mt CFR and around $493-495/mt CFR, respectively. Ukrainian mills are currently out of the market due to limited allocation but also considering certain logistic issues linked to the ongoing attacks by the Russian military. The latest billet deals from Russia stood at $455-462/mt CFR earlier in January, with current offers being at $465/mt CFR and slightly above, for February and early March shipments.

The SteelOrbis reference price for ex-Russia billet stood at $435-445/mt FOB Black Sea throughout most of the week, but at the end of the week the tradable level is evaluated at the upper end of the mentioned range.

In the GCC, billet offers from Oman have increased from the latest deals at $490/mt CPT to $515/mt CPT Oman and the UAE for new deliveries. Local billet prices in Saudi Arabia have remained at SAR 1,900/mt) CPT or $507/mt CPT, following the earlier reported rise in domestic scrap prices. Import offers from China have been reported at $475-480/mt CFR for March-April shipments, with the lower end considered workable in the current market conditions. The Iranian billet presence in the GCC market is limited due to the ongoing countrywide protests and restricted operations of mills in Iran. The IF billet prices from Iran are at $390-400/mt FOB, while most second-tier mills and some traders are targeting around $410/mt FOB for new cargoes as well as for lots at ports. The first-tier Iranian mills are reported to be insisting on $420-425/mt FOB. Overall, in the GCC, namely in Oman and the UAE, the estimated delivered billet prices from Iran are at $445-455/mt CPT, while some offers have still been reported by buyers at $460-465/mt CPT.

Ex-India billet offer prices are unchanged at $445-450/mt FOB with more mills attempting to divert more volumes for overseas sales amid the optimistic outlook in key destinations, coupled with the local market for semis entering a bearish phase. But the tradable level was reported at $440/mt FOB and below. An Odisha-based integrated mill has reported negotiations for 30,000 mt to the Middle East at $440/mt FOB. Similarly, there were a few bids from Asia at $425-430/mt FOB, but deals have failed to be confirmed as this level seems too low for most sellers. Local merchant billet trade prices have suffered a setback of INR 700/mt ($8/mt) to INR 39,300/mt ($435/mt) ex-Raipur in the central region.