Global View on Billet: Mood worsens in major outlets, but mills maintain prices ahead of China’s holiday

Prices for billets in major outlets have remained stable in mid-February and most Asian suppliers have been insisting on unchanged offer prices, but some slight negative biases have been seen in the Middle East market, mainly due to the pressure on rebar prices and the lack of very positive expectations for the period after the long holiday in China.

The Chinese billet reference price remained stable at $435-440/mt FOB for most of the past week and has settled just slightly higher, at $440-445/mt FOB, by the end of the week, mainly signaling that large exporting mills have already left the market for the holiday and even traders have not been ready to give any discounts. Traders have not wanted to carry risky positions into the holiday period. Even though local RMB prices in China posted some declines over the past week, the appreciating RMB has been exerting upward pressure on US dollar prices. The official PBOC mid-point rate has settled at $1 = RMB 6.945 by the end of the week, while the market rate stands at $1 = RMB 6.91.

Ex-Indonesia billet and slab offers have also remained stable, at $455/mt FOB and $470/mt FOB for April and May shipments, respectively.

In Southeast Asia, the market has also slowed down after the previous sales of Chinese 5SP billet at near $455-457/mt CFR Manila, and sizable ex-Iran 3SP sales at $440-448/mt CFR Thailand. Restocking has been completed, market sources said, and, even though most offers to the Philippines for 5SP are at $460/mt CFR and higher, buyers are still assessing the workable level at $455/mt CFR. If Iranian sellers remain interested in export sales after the Chinese New Year holidays, their low prices will put additional pressure on Chinese billet quotations. As for now, the outlook for Asian billet prices in the last days of February and in early March is from stable to negative.

In Turkey, domestic billet prices have settled mainly at $505/mt ex-works in offers and suppliers are not so willing to take a step back even though there is increasing pressure from sliding rebar prices. This week has been quiet in terms of billet sales, other than a $495/mt ex-works sale done in the Iskenderun region, down from the supplier’s initial offer of $505/mt ex-works.

Import offers from China have been mainly reported at $473-475/mt CFR with the lower end considered to be just fishing by traders. According to sources, an ex-China billet cargo has lately been booked at around $470/mt CFR Izmir. Ex-Indonesia material is indicatively evaluated at $490/mt CFR, while Malaysia and Ukraine are currently out of the market.

The SteelOrbis reference price for ex-Russia billet stands at $440-450/mt FOB Black Sea, which is down by only $2/mt on the lower end of the range. Unlike the previous two weeks, even the limited trading of billets from Russia to Turkey has faded away and the market mood is rather negative. Bids for Russian billet have eased to $465/mt CFR or below, translating to closer to $440/mt FOB for March shipment. Previous deals for Russian material were done at $465-468/mt CFR last week, as SteelOrbis reported earlier, which already marked a slight decline from mills’ targets of $470-475/mt CFR. Russian mills can still offer the shortest lead time to Turkish customers, but, with the weak rebar market in Turkey, they have failed to achieve higher prices.

In the GCC, the billet market has been rather quiet due to the approach of Ramadan and so local trade has been slow, while the availability of merchant billet has remained somewhat limited. Offers from Asia are nominal and at $475/mt CFR to the main ports of the GCC. Ex-Iran offers are at $445-455/mt CFR and up to $460/mt CFR for cargoes ready at ports, with little activity seen.

A few mills submitted ex-India billet offers at $455-460/mt FOB, up from $445-450/mt FOB earlier. Bids received from the major outlets abroad amid overall quiet market conditions have been reported at $440/mt FOB at best, but sellers have been unwilling to adjust prices and push sales after the local market overcame a brief correction and resumed a sharp upward trajectory, reflecting the bullish trading activity seen for long products.