Global View on Billet: Prices soften again, triggering demand for Asian origins

The trend in the global billet market has still failed to sustain and, after a slight rebound last week, prices have dropped again. As a result of discounts, trading for ex-Asia billets has accelerated this week. The overall outlook is still uneven, but a further gradual decline is possible.

Amid the weakening of sentiments in the Chinese local and export billet markets early this week, prices from major Chinese exporters have been at $425-430/mt FOB and some deals have even been discussed at $420-425/mt FOB. The rainy season has started to affect demand for long products in the Chinese domestic market, while inventory has been slowly increasing, even with some production reductions seen from mid-May.

The major Indonesian mill cut offers for July shipment by $5/mt on Tuesday and by another $5/mt on Wednesday, coming to $430/mt FOB. As a result, at least 100,000 mt of billets were sold at this level this week. The biggest part of the volume was for the Vietnamese market, market sources said, but “negotiations in Turkey and other Southeast Asian countries are also active”. There has also been a rumour that the Indonesian mill has sold billet to the Turkish market at $424/mt FOB, but market sources polled by SteelOrbis said that the level looks “unrealistic”, as the producer has already closed July shipments and has had no need to drop prices more this week.

The leading billet importer in the Philippines is heard to have bought 30,000-40,000 mt of Chinese 150 mm 5SP billets at $450/mt CFR, which is $5-6/mt below offers for a similar grade and size last week. In addition, a deal for 3SP billet is heard to have been done at $440-445/mt CFR Indonesia, down $5-10/mt over the past week. Ex-Russia billet was transacted at $448-450/mt CFR Taiwan early this week, but by Wednesday ex-China 3SP offers to Taiwan dropped to $445/mt CFR.

In Turkey, integrated steelmaker Kardemir increased its billet prices by $15/mt from its previous sales to $500/mt ex-works for S235JR and $510/mt ex-works for B420 grade and has managed to trade 57,000 mt to its regular customers. In the other regions of Turkey, the offer range stands at $500-515/mt ex-works, more or less stable week on week.

Import offers from China have been at $465-470/mt CFR for end-of-July and August shipments throughout most of the week, with one 25,000-30,000 mt booking reported at $466-467/mt CFR. The latest price from Malaysia stood at $475/mt CFR for 165 mm billet, with no news of deals reported. Earlier this week, indicative offers for Indonesian billet stood at $475/mt CFR, while later talk emerged in the market about a sale at $459/mt CFR. However, most market players estimate this deal as an unrealistic one. “No need for Indonesia to go $10/mt lower than China for the same lead time,” a trader told SteelOrbis.

Ex-Ukraine billet price indications in Turkey have been at $490-500/mt CFR this week for medium lots and for July shipments. The lower end of the range is considered workable, taking into account the origin’s geographical proximity.

The presence of billet suppliers from Russia and Donbass, the Ukrainian territory occupied by Russia, has remained limited in terms of allocation. The main reason is that the prices workable for buyers do not quite fit the price ideas of the suppliers given the current exchange rate. The latest small sales were closed at $460/mt CFR Turkey or around $440/mt FOB, while this week the same indications have been heard with buyers’ price ideas sliding to around $450-460/mt CFR.

Ex-India billet prices have officially been kept stable at $425-435/mt FOB. There are rumours that some large mills have been able to conclude trades at the higher end of the range, in line with previous improvements in ex-China prices of semis, but most market sources believe that this speculation does not reflect the weak market conditions. Local billet trade prices have edged down by INR 100/mt ($1/mt) this week.