Global View on Billet: Sellers’ attempts to push prices up fail in most major markets

The situation in the global billet market has been rather stable this week as the majority of attempts by sellers to push prices up have failed in most major markets and overall trading activity has slowed down with buyers waiting for clearer directions after the holiday at the end of Ramadan.

This week started with upward movements in China, where futures prices moved up amid positive expectations for demand and some production cuts. The reference price for ex-China 3SP billet settled at $435-450/mt FOB, increasing by $12.5/mt on average since late last week. However, the previous deals were heard at around $435/mt FOB, signaling that the market has failed to accept the new levels. Official offers for ex-Indonesia billet are stable at $455/mt FOB for June shipment, but the Indonesian mill can provide $5/mt discounts for local customers. This makes the Indonesian price almost in line with Chinese prices at the moment. One of the Vietnamese mills has issued an offer for billet at $450/mt FOB for late April-early May shipment. The price may be workable for some buyers, considering the closer shipping time. Another mill from Vietnam is asking for $5-10/mt higher.

There has been a rumour that around 100,000 mt of ex-Indonesia billets have been sold to Egypt recently, but the price initially circulated in the market - $468-469/mt CFR - has been widely denied by SteelOrbis’ sources. “Their price is still $455/mt FOB today for June shipment. So, anything below $490/mt CFR in the Middel East is not possible,” a Singapore-based trader said, commenting on the latest ex-Indonesia prices. Also, a few other sources agreed that the lowest level for Egypt could be from China at $480/mt CFR, but anything below this level is not reasonable for sellers.

Billet prices in Turkey’s domestic market have settled at $520-530/mt ex-works in the Izmir and Iskenderun regions, while in the Marmara region the offers are at $510-515/mt ex-works/FOB. Import offers from China have slid to $480/mt CFR by the end of the week, while two deals have been discussed in the market as having been closed at the end of last week at $475/mt FOB or slightly below. Ex-Indonesia billet prices are indicative at the moment since the supplier does not seem very interested in boosting sales at the moment, not being under pressure to sell. Malaysia is also not active in the market. According to sources, the suppliers are sold out for May shipments while thinking it is a bit early to offer for June. Overall, import billet prices are quite workable in Turkey since Turkish mills’ own billet production costs are at around $530-540/mt. As a result, some pressure may be exerted on the current import scrap prices for May shipments.

The SteelOrbis daily reference price for ex-Russia billet has increased indicatively by $5-10/mt over the past week to $455-460/mt FOB Black Sea for May shipment. Some of the official offers from Russian mills have been heard at $470/mt FOB Black Sea, and even at $480/mt FOB, although buyers’ price ideas are generally below $460/mt FOB. “There is a lack of firm offers from Russia. If the exchange rate is $1 = RUB 90 and above, maybe allocation for exports will increase. I do not see anything below $480/mt CFR Zonguldak for sellers,” a seller commented to SteelOrbis. Market players reported a previous deal for a decent volume at $470-475/mt CFR from Russia to Turkey, which translates to $450-455/mt on FOB Black Sea basis.

Prices for import billet in Southeast Asia have posted some slight rises over the past week, rising by up to $5/mt, but overall market conditions have been inactive due to the holidays. The latest Asian offers for 5SP billet to the Philippines have been at $465/mt CFR Manila and above, versus $460-461/mt CFR seen late last week. However, the tradable level is still not above $455/mt CFR, and most buyers have been out of the market. Early this week, offers for Iranian billets were heard at $452-453/mt CFR to Thailand and Indonesia, up from the previous deal done at $447/mt CFR to Indonesia a week ago.

Iranian billet export activity has been quiet ahead of the religious holiday with prices remaining within $415-425/mt FOB for end of May and June shipments. In the GCC, particularly in Oman and the UAE, offers have remained at $445-455/mt CFR with no fresh deals reported. In the meantime, ex-China offers to the GCC, including Saudi Arabia, have been reported at $475-478/mt CFR, versus buyers’ price ideas at closer to $465/mt CFR. In Asia, the latest Iranian billet offers have been reported at $453/mt CFR, following a 35,000 mt deal closed at $447/mt CFR Indonesia last week.

The ex-India billet reference price stands at $420-450/mt FOB this week, up by $5/mt on average from last week. There has been a rumour about a trade at $450/mt FOB, but neither the buyer nor the seller has confirmed the trade, with market participants claiming that this was owing to the elevated competition from multiple sourcing options still available for buyers in Asia. In contrast, confirmed deals are mostly reported lower and closer to the mid-point of the range. For example, an eastern India-based mill reported a sale of 20,000 mt for the Middle East at $430/mt FOB, while another seller claimed a sale of 30,000 mt at $435/mt FOB to an undisclosed destination, sources said.