Global View on Billet: Prices at standstill as sellers fail to find reasons for increase

The global billet market has been stable over the past week in line with expectations, reflecting the firm mood in China after the recent production cuts. It is hard for prices to move in any direction since, even though market participants do not expect the resumption of a downward trend, a price increase is also doubtful, at least in the near future.

The ex-China billet reference price is stable at $420-425/mt FOB with firm offers mainly at the higher end of the range. Mills have been cutting steel production due to weak demand and are trying to fulfill their annual plans and, since profits have kept falling, overhauls are expected to be bigger in December. Export prices from China may rise if local quotations in China increase, while the local market was stable this week because of the weak demand.

An Indonesian mill has managed to sell billets for January shipment at $430/mt FOB, which is stable compared to the previous deals for December shipment, though down from the offer level at $435/mt FOB seen late last week. This price is too high for Asian importers, so it is expected to end up in the Middle East, according to market sources.

Turkish domestic billet offers have increased by $5/mt over the past week to $505-515/mt ex-works with some activity seen in the Iskenderun region at close to $510/mt ex-works. The strong import scrap market and higher workable prices for rebar in the local market in Turkey $550-560/mt ex-works are the main reasons for the higher billet prices.

Import offers from China have settled at around $465/mt CFR for early January shipments with not much activity seen. Turkey’s importers are not quite interested in negotiations, considering the long lead time and since purchases of BF billet accompanied by additional risks. The workable price idea is closer to $455/mt CFR, while Turkey’s own billet production costs are at around $500-505/mt. Ex-Indonesia billet offers are indicative at up to $470/mt CFR, with no interest seen. January shipment billet from Malaysia is offered at $485-490/mt CFR, with the latest booking for 25,000 mt closed within the same price range.

The SteelOrbis reference price for ex-Russia billet is unchanged at $435-440/mt FOB for the second week in a row. Most buyers in Turkey have reported offers from Russia at $455-460/mt CFR, in line with the previous levels and the latest deals. In Egypt, offers for this origin are at $470-475/mt CFR and slightly higher, with no trading activity reported, SteelOrbis has learned.

In the GCC, billet trade is mainly concentrated in the domestic market for small lots. In the UAE and Oman, local billet offers are at $485-490/mt CPT, stable over the past fortnight. In Saudi Arabia, the latest offers are at $480/mt CPT, again stable from early November. Import offers from China are at $457-462/mt CFR for January shipment. According to sources, around 50,000 mt were booked this week at slightly below $455/mt CFR Saudi Arabia. Iranian offers to the UAE and Oman are at $430-435/mt CFR and $435-440/mt CPT, respectively, sources report. Still, buyers are pushing for $10/mt discounts. Overall, Iranian EAF-based billet is priced at $400-415/mt FOB for December and January shipments, including offers from some mills and traders. Ex-Iran IF billet is priced at $385-395/mt FOB, sources report.

In Southeast Asia’s import billet market, some buyers have been interested in purchases from sanctioned billet suppliers after receiving discounts as most Asian billet offers have been stable. A deal for ex-Iran 3SP billet is reported to have been done to Thailand at $435/mt CFR. The original offer price for Iranian material in Thailand was at $442/mt CFR last week. Most offers for Chinese 3SP billets to Thailand and Indonesia have been heard at $440-445/mt CFR, and up to $450/mt CFR from some suppliers. In the Philippines, negotiations for ex-China 5SP billet have continued at $442-443/mt CFR, but no confirmed sales have been reported so far.

Buyers in Taiwan have assessed import billet prices as being too high and so they have either been considering buying import scrap at stable prices or have been looking for finished steel from some Asian suppliers at lower prices. 3SP billet offers of Chinese origin to Taiwanese buyers have been at $445/mt CFR, while the lowest offer level was at least $10/mt below that in October, when short position selling was rather active. The lowest 3SP offers have been heard from Russia at $440/mt CFR, also with no interest from the buyer side.

While the tradable level for ex-India billet prices is stable in the range of $420-430/mt FOB, some sellers are heard to be submitting offers higher at around $440/mt FOB, even though stray deals have been confirmed only at lower levels. A government-run mill is reported to have sold 20,000 mt of billet on spot basis at $425/mt FOB, but the shipment destination was not disclosed by the seller.