Global View on Billet: Prices stable with negative bias as no decent support from China or raw materials

This week, most major billet markets have been stable or down slightly as there has been no pressure from demand in the offseason and not much support from raw materials, while sentiments in China have also failed to improve.

The ex-China billet reference price is stable at $435-440/mt FOB. Most offer prices from Chinese mills are at $440/mt FOB, but some traders were offering $436-437/mt FOB in the middle of the week. Demand in the local market has been weak due to cold weather, so small discounts could be obtained from some exporters. There has been rather weak demand for Chinese billet in the global market, but sporadic sales have been heard as “$440/mt FOB or slightly below is reasonable in the current conditions. [There are] no cheaper options,” an international trader said.

At the same time, the main Indonesian mill has increased its billet offers by $5/mt to $455/mt FOB, while its slabs are also up by the same margin of $5/mt, to $465/mt FOB. But the move has been due to the lack of interest from the mill in selling billets up to the end of February as the producer believes prices will improve after the Chinese New Year holiday. Billet for April shipment is still available. But, for slabs, offers from Indonesia are just for May shipment as the seller is heard to have traded two lots to the US at the previous level near $455/mt FOB.

Though futures prices in China posted an increase on January 29 and some sellers of Chinese billet in Southeast Asia have been targeting higher levels, most buyers do not see reasons for an upward price trend. Some premiums are still seen for higher grades or rare sizes. In the Philippines, the lowest offers for 150 mm 5SP billet are at $455-460/mt CFR Manila, up slightly from $455/mt CFR last week. Offers for 130 mm 5SP, which are more rare and more popular in the Philippines, have been reported at $462-465/mt CFR at the lowest.

In Taiwan, after some rebar producers purchased billet from Russia’s Far East region at $440-445/mt CFR for April shipment, no cheap options have been available and most Chinese billet offers are standing at $460/mt CFR. However, there has been some demand for vanadium-added billet in Taiwan, which has been offered from China at $485/mt CFR.

Trade in Turkey’s billet market has been seen only in the local segment and predominantly in response to the new offers announced by Kardemir, since they were set at acceptable levels for buyers. As a result, along with the regular re-rollers, even some steel mills have booked from this supplier since their own billet production costs are higher. Local integrated producer Kardemir announced its new price for steel billet with a $5/mt price decrease from the early January offers, to $495/mt for S235JR and $505/mt for B420, both on ex-works basis. The supplier managed to close sales within a short period of time totaling 53,500 mt.

In the import segment in Turkey, business has remained quiet since the prices offered by most suppliers are above buyers’ expectations and, moreover, the cargoes are mainly available for late March and April shipments, from Asia in particular. Import billet offers from China have settled at $473-477/mt CFR this week with little interest seen as it seems that the buyers are not ready to deal for anything above $470/mt CFR. Indonesian billet is at $455/mt FOB or around $487-490/mt CFR and is not workable. No allocation from Malaysia has been reported either, with the indicative offers remaining at $500-505/mt CFR for April shipments, apart from the rumours of a deal at slightly above $495/mt CFR closed for a shorter lead time. Ukraine has been out of the market due to a production slowdown, resulting from Russia’s continuous military attacks against Ukraine’s infrastructure and civilians.

The SteelOrbis reference price for ex-Russia billet is stable at $440-445/mt FOB, mainly as overall offers have been very rare. One of the reasons for the lower allocation from Russia has been the further appreciation of the Russian ruble against the US dollar with the exchange rate hitting the lowest level since February 2023, at $1 = RUB 75 (as of January 26). In comparison, in early January the rate was nearly $1 = RUB 80.

In the GCC, where domestic rebar demand and pricing have been at rather high levels in most markets, regional billet offer prices have also been set at high levels, and, moreover, some sources report that allocation generally is somewhat limited, especially in the UAE. Another reason is that the geopolitical tension in the region creates negative expectations and additionally limits the billet allocation in the Gulf. As a result, interest in billet imports from Asia has been strong lately, particularly from Saudi Arabia. Since mid-January, Saudi Arabia has booked two billet cargoes from China, via traders, for April shipment, consisting of 50,000 mt each, while both deals have been closed at $475/mt CFR, SteelOrbis has learned. The workable price has increased by $10/mt compared to the previous import deal, again for Chinese billet, closed earlier in January at $465/mt CFR, for 50,000 mt. The latest offers from Asia to Saudi Arabia have been standing at $475-480/mt CFR, while Indonesian billet is estimated at around $485/mt CFR or slightly above, depending on the port of discharge.

Ex-India billet offer prices are stable in the range of $445-450/mt FOB with some sellers attempting to nudge up offers to highs of around $460/mt FOB, but the tradable level has been closer to $435-440/mt FOB, as buyers have been accepting prices only if they are close to ex-China offers. A few sellers have been in negotiations at $435-440/mt FOB, mainly to the Middle East, to destinations like Oman and the UAE. It was pointed out that, with the local market for semis entering a downturn and prices suffering setbacks, more sellers have been offering volumes for overseas sales