Global View on Billet: Markets calm down after previous hike, but some optimism remains

Prices for billets in most major markets have posted only a limited increase this week, following bigger gains previously. Buyers have been resisting any further rises, so the latest increase have stayed mainly in offers, not reflected in deals. Nevertheless, it is unlikely that the trend will change soon due to increase in costs and high freights.

The SteelOrbis reference price for ex-China 3SP billet stands at $460-470/mt FOB, increasing by $5/mt from last week. At least three large exporters have confirmed that $465-470/mt FOB would be reasonable for sellers right now. One of the main reasons has been the recent success with a number of deals done to Southeast Asia at $475-485/mt CFR for base grade, which translates to $450-460/mt FOB. In addition, demand in the local Chinese market has been a bit better, though prices have been increasing slowly compared to those seen in the export market. Some Chinese exporters also claimed that, after the recent jump in iron ore prices and recent announcements that the Chinese government will keep controlling steel production, their billet offers are not below $470/mt FOB.

The Indonesian mill increased its billet offers for April by another $5/mt early this week to $490/mt FOB, while its offers for other products like slabs and wire rod were raised by the same amount. There have been no deals at such high levels, but some traders believe that the mill is waiting for demand to resume from Saudi Arabia or other Middle Eastern country,

In Southeast Asian market, though most Asian billet exporters have still been bullish this week, trading activity has faded away and buyers expect prices to stabilize at previous levels. Most Chinese 150mm 5SP billet offers have been reported at $485-490/mt CFR Manila with one importer in the Philippines saying that he feels the market is entering a plateau. The previous deals for this grade were done at $481-483/mt CFR to the Philippines last week, while $485/mt CFR is said to be the highest tradable level this week, but the price level is said to be nominal without firm bids. As for 150 mm 3SP billets, Chinese traders were targeting $485/mt CFR or above early this week, though with zero response from buyers. After the decline in futures prices seen in China on Thursday, March 19, a few offers for 3SP billet have been reported at $475-477/mt CFR Indonesia, signaling a stabilization compared to last week.

The Turkish market has posted some increase for local rebar and import billet, both being a result of the consequences of the ongoing war in the Middle East. While Asian billet offers have been rising as regional buyers are making up for the missing Iranian volumes, domestic rebar prices in the Turkey have been climbing amid spiraling market expectations but are not yet fully supported by demand and are considered to be rather artificial. From the end of last week, the domestic rebar prices in Turkey have added another $5-10/mt to $575-585/mt ex-works. Import billet offers from China have been at $515-520/mt CFR during the week with no interest from buyers.

Ex-Russia and ex-Donbass billet offers for April shipments are being reported at $475-480/mt CFR versus $470-480/mt CFR seen at the end of last week. Some suppliers say they receive rare bids for small tonnages at $475/mt CFR. The SteelOrbis daily reference price for square billet to be shipped from the Black Sea has climbed from $440-450/mt to $445-450/mt FOB since the end of last week.

Ex-India billet prices have increased for the second consecutive week by around $5-10/mt to the range of $465-475/mt FOB, while trade activity has been muted as higher freight rates have made Asian buyers cautious about concluding bookings. The local merchant trade billet market has showed signs of cooling down after recent surges. Trade-level billet prices are down INR 1,250/mt ($13/mt) to INR 44,250/mt ($477/mt) ex-Mumbai and have lost INR 750/mt ($8/mt) to INR 41,450/mt ($447/mt) ex-Raipur in the central region.