Global View on Billet: Price hike attempts by some mills fail to result in deals

A number of billet suppliers have attempted to push prices up in the global market, but buyers in the major outlets have remained pessimistic and the very few deals recorded have been reported at lower levels. The drop seen in futures prices in China on Friday has also added to the negative mood, with most sources not expecting further hikes, at least in the near future.  

Prices for ex-ASEAN billets from the major mills in the region have increased this week and have returned to above $500/mt FOB, though the market has not accepted the new level and the last deals were still reported below the level in question. The official offers for ex-Indonesia billet have increased by $5-10/mt over the past week to $500-505/mt FOB. However, the last two deals for ex-Indonesia billet were at $495/mt FOB and $497/mt FOB last week, according to sources.  

The upward push for ex-ASEAN mills has again been coming from the Chinese market. However, given the drop seen in futures and spot prices in China on Friday, September 8, market sources agree that the increase in Asia could be very short-lived. Ex-China 3SP billet offers lost $10/mt on Friday, coming to $500-510/mt FOB. A number of supportive measures for the real estate market in China have been positively impacting the mood in the market during the week, but the mood has turned bad again as demand has remained weak and may remain slack in the near future, also given still high steel production and the government’s call to ease the rises in futures prices.  

Import billet offers have increased in the Southeast Asian market this week, but buyers have been mostly reluctant to accept any higher levels as they managed to conclude low-priced deals just last week. The latest deals for ex-Indonesia 5SP billet were closed to the Philippines at $510/mt CFR, according to sources. This week, most offers for Asian origins have been coming for 5SP billet at $520-525/mt CFR and some are even at $530/mt CFR. There has been talk that 30,000 mt of ex-Iran billet were sold to Thailand at $498/mt CFR last week, but also a few traders have reported offers at $495/mt CFR for Iranian material.   

Iran’s billet export activity has been quite high recently and several mills have been in the market. However, they did not manage to increase their workable prices. According to sources, Chadormalu Mining and Industrial Co. has recently traded a 30,000 mt 3SP grade billet cargo ready for loading at Bandar Abbas port. In addition, Arfa Iron and Steel has sold 60,000 mt of billet via commodity exchange to be shipped consequently in six lots. The abovementioned deals have been closed at $465/mt FOB, while initially the mills targeted $470-475/mt FOB. Some bids, however, have been at below $460/mt FOB, SteelOrbis has learned. In addition, Esfahan Steel Company has opened a regular 30,000 mt billet tender with validity of a few days. The market players believe the supplier may manage to sell the cargo again at around $460-465/mt FOB, since it is for October shipment.  

In Turkey, integrated steelmaker Kardemir has opened billet sales this week with a price increase of around $15/mt price from the previous round, to $525-535/mt ex-works depending on the grade. The producer has managed to sell over 50,000 mt of material in a short while and, overall, its offer is considered by many to be a normal market price. Billet suppliers in the other regions have been offering close to Kardemir’s range. Small trades have been reported in the Iskenderun region at $530-535/mt ex-works, while the supplier in the Marmara region has been offering $545/mt CPT or around $535/mt ex-works.  

For the import segment, where suppliers from Russia and Donbass have been aiming to increase the workable prices for their billets, Kardemir’s hike has not been bullish enough to provide them with some support. The targets of some traders for mainly ex-Donbass cargoes have reached $500-505/mt CFR, while the latest deal for the same material was reported by SteelOrbis last week at $485/mt CFR. A Russian supplier that normally sells for immediate shipment was aiming for $505/mt FOB Novorossiysk earlier this week, versus the previous deal closed a couple of weeks back at $490/mt FOB. However, the most recent sale, of 3,000 mt, has been closed at $510/mt CFR Aliaga.

The SteelOrbis daily reference price for ex-Russia billet has settled at $470/mt FOB by the end of the current week, up $12.5/mt from the end of August. Most players report the number of offers from Russia in the market is scarce, while some sizeable position cargoes have lately been purchased from Donbass and, according to some sources, billet has already been sold to Egypt at $510-515/mt CFR. It is also worth mentioning that in late August there was a 10,000 mt deal from Russia to Egypt via a trader at $470/mt FOB, while another 5,000 mt lot might be underway. 

Ex-India billet offer prices are at $510-520/mt FOB and, though trade has remained inactive, a few mills have reported a rise in the number of inquiries. The sources said that inquiries were being received from West Asia, but local integrated mills have not been pushing for deals. They have all been increasing long product output in view of tight supplies and high prices in the local market, and the higher captive conversion has left very small billet volumes as an exportable surplus. Government-run mills, after a long pause, are heard to be returning with export offers, while private mills are awaiting a further consolidation of prices in key destinations before submitting spot offers.