Global View on Billet: No settled trend across major outlets, but hopes for slight rise reemerge

There has been no settled trend in the global billet market this week, with trading being slow almost everywhere. But some tentative signs of a further slight increase have reemerged, supported by sentiments in China and firm prices of raw materials, including scrap and iron ore.

In China, the market was stable early this week and sentiment improved on Thursday and Friday, following rises in futures prices, lower-than-expected production data for March and firm costs. The Chinese billet reference price has settled at $460-470/mt FOB, up by $2.5/mt on average compared to last week. The lower end of the range corresponds to offers in the regional market, while to Turkey and the MENA region sellers have been targeting $485-490/mt FOB. Some gradual revival in local demand has also provided some support. China’s March production witnessed a 6.3 percent drop year on year, dropping below the 90 million mt mark. 

The leading Indonesian mill has increased offers for billets this week by $10/mt in total to $495/mt FOB for June shipment. But some negotiations have been held with Middle Eastern buyers at $485-490/mt FOB, stable compared to the previous bookings. Market sources said that, since freight rates are very volatile and transportation routes have changed in the GCC, most negotiations are held on FOB basis.

In Southeast Asia, most bids for Chinese billets (both 5SP and 3SP) have been at only $470-480/mt CFR, down by $10/mt from the previous bids and deals seen in the previous few weeks. In the Philippines, after the easing of the tradable levels to $485/mt CFR or even slightly lower early this week, rare offers have come back to $490/mt CFR. This week’s offers for Chinese 3SP have been heard at $482-483/mt CFR to Thailand and Indonesia, easing from $485/mt CFR last week. But there has been no clear trend as futures in China have increased and, if the same mood persists next week, this will support prices in Southeast Asia as well.

While demand for base 3SP billet has been limited, there has been talk about 130 mm vanadium-added billet sold to Taiwan at $510/mt CFR in the past week. The extra for vanadium is $15/mt and the extra for the size is $5-10/mt. 

In Turkey, limited sales of steel rebar and somewhat weak pricing have had an impact on the billet market situation as well. Domestic billet offers have mainly been at $550-560/mt ex-works, with no fresh sales reported. Some suppliers are even targeting $565/mt ex-works Izmir, bringing the local price in line with export prices. Still, some buyers believe $545/mt ex-works should be achievable soon particularly in the Iskenderun region.

Import offers from China have mainly been at $520/mt CFR for June shipment this week, up $5/mt from the previous levels. According to sources, $515/mt CFR is workable for some mills in Turkey, which have been facing certain issues with deliveries of earlier booked billet from Asia due to the Middle East crisis. Others report they would be looking for nothing over $505-510/mt CFR. Ex-Malaysia billet offers for June shipments stand at $535/mt CFR, with bids at $520/mt CFR maximum. Ex-Indonesia material is at $495/mt FOB, corresponding to around $545/mt CFR and being out of the range of interest of Turkish customers. Ex-Ukraine indicative offers for May-June shipments have been reported at $540/mt CFR, versus workable levels $5/mt lower which were reported earlier.

In the GCC, the billet market situation has been somewhat tense since many producers fear they will have issues with feedstock availability. While most of the large steelmakers have each secured at least one 50,000 mt lot from Asia, namely Indonesia, the smaller producers seem still to be seeking imports. The indicative offer levels from Asia have been reported mainly at $530/mt CFR, with levels $5/mt lower possible. In Oman and the UAE, local billet prices are not voiced at present due to limited allocation, while in Saudi Arabia the offers are at SAR 2,100/mt or $560/mt CPT. In Egypt, imports are blocked by the recently announced definitive safeguard, while domestic offers have increased to EGP 33,500-34,500/mt or around $565-585/mt ex-works depending on the supplier. The billet price rise followed the increase in local rebar prices in Egypt by EGP 1,800/mt ($30/mt). The indicative import billet offers are at $515-525/mt CFR depending on the origin, being of no interest to local buyers.

Russian billet suppliers in the Black Sea region have been asking for $510-515/mt CFR in Turkey, which is $5-7/mt higher than the prices reported in early April. But while there were a few deals done for small volumes at $505-510/mt CFR around ten days ago, there were no contracts afterwards. The firm bids in case of emergency will be at $490-505/mt CFR now. The worsening mood has been confirmed by sellers as well. Some of them have stopped offering, understanding that $510/mt CFR is impossible at the moment. The SteelOrbis reference price for ex-Russia billet has settled at $465-475/mt FOB, with the midpoint at $470/mt FOB, moving down by $5/mt from last week’s high.

Ex-India billet offer prices have been maintained at higher levels of $480-490/mt FOB. Though enquiries have been coming in from the Asian region, the discounted deals being sought were not working out, with sellers claiming that input cost rises, particularly energy, made any such price adjustments unviable. The sources said that at least one large Odisha-based mill’s offer for 30,000 mt of prime concast billet was pulled back after sales negotiations failed to arrive at a consensus, with the buyer seeking a final contract price of $460/mt FOB as an adjustment to partially offset the high CIF (cost, insurance, freight)-based price driven by higher freight and shipping surcharges.