Global View on Billet: Suppliers more confident on uptrend as scrap rises

Friday, 08 October 2021 17:36:07 (GMT+3)   |   Istanbul
       

- Major billet suppliers in the international market have been bullish this week and, even if some of them have still been cautious in terms of giving firm offers, their confidence in a price increase for the next round of sales has increased. This is due to the visible increase in scrap prices and the improvement in demand for billets in different parts of the world.

- Following a weak September, strong rebound signs have been seen in the Turkish market. Billet prices in Turkey have increased by $15-20/mt over the past week with some of the local mills already testing $650/mt ex-works levels, taking into account higher scrap prices. Import bids have risen to as high as $625/mt CFR in the northern part of Turkey, while in the Izmir and Iskenderun regions the workable level is estimated at $630/mt CFR and above. Sources say that the billet market allocation is limited nowadays for Turkey.

- Most large CIS-based producers have withdrawn their billet offers this week, preparing for a hike amid recent gains in Turkey and having limited allocations left after three large deals to China before its holiday. If late last week the mills’ targeted levels were $600-605/mt FOB Black Sea, by the end of this week the sellers’ price ideas have been heard at $620/mt FOB.

- On October 8, China’s import billet market resumed work after the long holiday at much higher levels in line with expectations, amid an increase of RMB 100/mt ($15.5/mt) in domestic prices, higher futures prices, and the positive outlook for demand. Suppliers have been active in offering, mainly at $730/mt CFR for EAF/BOF billet, and, though no new deals have been reported yet, the tradable level has already reached $720/mt CFR or so. Some restrictions for re-rollers in China, implemented in late September due to the energy shortage, have been lifted in early October, which has supported the outlook for import billet demand.

- While China was absent, a slight increase in activity has been seen in Southeast Asia. Deals for ex-Far East Russia billet have been reported at $693/mt CFR, though prices have posted some increase, they are still below $700/mt CFR and suppliers expect a further more rapid hike next week when Chinese customers come back fully.

- Indian billet exporters, led by government-run steel mills, have stepped up to aggressively push higher volumes overseas, particularly to the Asian market, although bids from buyers have continued to be below the target, which has been at $630-635/mt FOB. Receiving bids for 150 mm billets in the past week only at $615-620/mt FOB, most suppliers decided to wait for better prices in the coming week.

- Sentiment among Iranian semi-finished steel exporters has also been positive and at least two mills have opened sizable-volume tenders for both billets and slabs. As regards billet exports from Iran, the latest deal has been reported for a relatively small tonnage of 10,000 mt at $638.5/mt FOB, up by $2/mt from the contract done a week ago. With the freight costs assessed at about $60/mt, this price corresponds to $698-699/mt CFR Asia.

Market

Price

Weekly change

CIS exports

$600-615/mt FOB

+$5/mt

China imports

$720-725/mt CFR

+$20/mt

SE Asia imports

$690-695/mt CFR

+$2.5/mt

India exports

$620-630/mt FOB

stable

Iran exports

$635-640/mt FOB

stable

Turkey local

$635-650/mt ex-works

+$15-20/mt

Turkey imports

$625-640/mt CFR

+$15/mt

Turkey exports

$630/mt FOB

+$5-10/mt


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