Global View on Billet: Negative bias emerges, but some exporters still insist on higher prices

- Billet prices in a number of markets have posted decreases this week after weeks of uptrend but some exporters, who kept selling to traders, have still managed to conclude deals at slightly higher prices, which proves that the general trend in the global market has not reversed yet. 

- Trading activity in the ex-Russia billet export market has remained dull with only a few sales rumored to have been done. In general, bids are still reported at rather low levels from Turkey, which are not acceptable to some sellers, particularly those from Russia and Donbass. Some, however, seem to have preferred to sell. According to sources, 3,000 mt of billet have been sold recently at $530/mt CFR to the Karabuk region in Turkey, while the main bids last week stood at $520-530/mt CFR for small cargoes for prompt shipment. The SteelOrbis reference price for ex-Russia billet has declined to $505-515/mt FOB Black Sea from $515-520/mt FOB, as bids and rare trades have been reported at reduced levels. Some of the Russian sellers, however, are still aiming to sell at $560/mt CFR minimum this week for immediate shipments.

- Turkish integrated steel producer Kardemir has announced its new billet sales prices for the domestic market, cutting prices quite significantly compared to the previous round of sales. One reason is the mill’s aim to spur sales while the market has been quite silent ahead of the holiday and due to ongoing financial issues. Another is the previously concluded low-priced import billet bookings reported earlier in June. Over the past week, Kardemir has dropped its billet offers by $25/mt to $575/mt ex-works for S235JR grade and to $580/mt ex-works for B420 billet. Some sources report the supplier has managed to trade around 20,000 mt. Other billet producers in Turkey have also decreased their local price ideas from last week’s $595-610/mt ex-works levels. In particular, the price idea in the Karabuk region is at $590/mt CPT, while in the Marmara region the latest price has been reported at $595/mt CPT. Offers in the Izmir and Iskenderun regions are now evaluated at $600/mt and $580-590/mt respectively, both on ex-works basis.

- At the same time, offer prices for billet from the main Indonesian mill have increased again early this week amid continued sales to traders and the reported closure of order books for July and even partly for August. Ex-Indonesia offers for 5SP billet have increased by $5/mt from the previous level to $525/mt FOB for August shipment. This happened after the mill managed to sell a few lots at $520/mt FOB, its previous target level, to traders. At least one deal closed at $520/mt FOB will be for the Latin America market, sources confirmed. There has been a lack of ex-Malaysia billet offers lately and the estimated level has been heard at $530/mt FOB. Most major mills have been focusing on rebar or wire rod sales. Last week, a deal for ex-Malaysia rebar was concluded at $560/mt CFR Singapore on theoretical weight basis. In addition, the latest offers for ex-Malaysia wire rod have been heard at $550/mt FOB.

- Nevertheless, Southeast Asian import billet customers have been resisting the recent rises, seeing the range-bound prices in China. Offers in Southeast Asia’s import billet market have inched up as well by up to $5/mt, being reported at $530/mt CFR Manila for 3SP and $535-540/mt CFR Manila for 5SP. But counterbids were lower at $515-520/mt CFR. The highest tradable level for 5SP billet has been reported at $520/mt CFR in Indonesia, while only Iranian origin billet can be offered by traders at close to this level. The average local billet price in China has fluctuated in a limited range in China lately, and the ex-China billet offers have remained stable from last week at $510-530/mt FOB, though more exporters were ready to sell at the lower end of the range, down by $5/mt over the week. 

- International billet traders have continued taking new positions from Iranian mills, after the purchasing lull seen in May and early June. Moreover, they are paying slightly higher prices for new cargoes, though there is not much improvement seen in the main sales destinations such as Asia and the GCC. According to sources, in recent days some Iranian mills have traded billets in their export tenders within $491-493/mt FOB, up from the previous sales at $490/mt FOB. The latest transactions have been closed for two lots of 30,000 mt each and one lot of 20,000 mt, market players report. The cargoes are for August delivery. Most market sources believe that these volumes will logically be sold to GCC countries, though where offers of $510-520/mt CFR to the UAE and Oman are barely profitable, these being equal to the levels of the ex-Iran FOB prices with $20-25/mt freight.

- Indian suppliers have been also trying to push billet export prices up, targeting at least $520/mt FOB in the tenders this week. Though there have been rumors that even higher levels of slightly below $530/mt FOB have been accepted by customers, this has been nor confirmed by the time of publication and many sources believe that it could be speculations. “Seeing CFR prices in Asia and Turkey, I don’t believe that any trader will pay this. Even $520/mt FOB is high,” a source told SteelOrbis.