Global View on Billet: Price rise continues with buyers more eager to purchase

The uptrend in the global billet market has continued this week, as together with greater confidence in China and still high raw material prices, more buyers have been considering the resumption of purchases.

The Indonesian mill has announced a further increase in offers this week - by $5/mt to $520/mt FOB for 3SP billet on Wednesday, and to $525/mt FOB by the end of the week. A deal for around 20,000-30,000 mt of ex-Indonesia billet is heard to have been done to Latin America at $512/mt FOB last week with the freight estimated at $35-40/mt for a large volume. Another small-volume contract was confirmed in the local Indonesian market at $517/mt FOB or $540-545/mt CFR early this week. Even though the acceptable prices for billets are relatively low in Asia, mills are unlikely to cut offers in the near future, given the sizable slab sales concluded over the past few weeks. In particular, one of the Malaysian producers traded 80,000-90,000 mt of slabs to Turkey, while the Indonesian producer has managed to sell 150,000-180,000 mt of slabs to other destinations, also for December shipment. In total, the monthly slab and billet allocation from Indonesia and Malaysia is not below 400,000-450,000 mt, so with the latest billet and slab sales the bigger part of December shipment material has been sold out.

Ex-China 3SP billet offers have also reached $525/mt FOB, though demand could be found at closer to $515/mt FOB. The overall offer volume is limited.  

Offers for 5SP 130 mm BOF billet by traders for mainly ASEAN origins have been voiced at $535-545/mt CFR Manila, $10-15/mt higher than last week. One deal was rumored at $525-530/mt CFR early this week. Even though bids are still lagging behind and are mainly at $520/mt CFR, the new purchases are expected at $530/mt CFR or above, according to market sources.

Offer prices for ex-Russia billet in the Far East have increased too, following some increases by ASEAN-based and Chinese mills since last week. The leading mill based in Russia’s Far East has been offering 150 mm billet at $515/mt CFR for December shipment to Taiwan, up by $15/mt from the level reported early last week. A deal for vanadium-added billet from Japan was done at $520/mt CFR to Taiwan late last week, when ex-Russia base material was sold at $505/mt CFR, up by around $10/mt from the previous transaction level.

In Turkey, the import billet market is mainly driven by limited allocation, while demand is mostly coming from small buyers, mostly the merchant bar producers. The workable import level for ex-Donbass billet has been mainly evaluated within $510-517/mt CFR this week, while a few deals have been reported at the upper end of the range, and some sources believe that in some cases $520/mt CFR may also be workable shortly. As for Russia, most producers are unwilling to be active in exports, while local market sales are currently more profitable for them, also while there is still an export duty of five percent (based on the exchange rate). The SteelOrbis daily reference price for ex-Black Sea billet has settled at $490-495/mt FOB by the end of the week, up by $7.5/mt from the earlier levels.

In the local market in Turkey, Kardemir has traded over 30,000 mt at $543-553/mt ex-works, managing to increase its workable price from the earlier deals at $525-535/mt ex-works. In other regions, the price is at $545-555/mt ex-works. Only one sale has been registered in the Iskenderun region, at $563/mt ex-works, but for a volume of only 1,000 mt.

Iran’s billet export prices have generally remained stable this week, only inching down slightly in a sale from a second-tier mill. According to sources, one producer has traded 20,000 mt of billet for end-of-December shipment this week at $468/mt FOB. Previously, a 30,000 mt lot was sold at $470/mt FOB by one of the main suppliers. Overall, ex-Iran billet prices are set to stabilize for now, given the strong scrap and raw material prices globally. However, limited demand and the still modest bids from the major buyers, especially in Asia, may prevent Iran from achieving much higher prices.

Ex-India billet reference prices have reached $500-515/mt FOB, with the midpoint at $507.5/mt FOB, up by $17.5/mt over the past week. But some offers submitted by private mills at the higher end of the range could not be converted into deals. Some market sources said that a government mill which held export tenders for two lots of 30,000 mt each received an average highest bid of around $512/mt FOB, higher than the sub-$500/mt FOB expectations of the seller and trade circles. However, some market sources claimed that the tenders were cancelled and that the abovementioned prices are mills’ targets, with real bids lower. Another western India-based mill reported a deal with a Singapore trader for an onward sale at $510/mt FOB.  

* - latest deal prices