Global View on Billet: Trade accelerates in major outlets, price rises terminated

The uptrend in the global billet market has run out of steam this week in major destinations like China and Turkey. However, there are no widespread negative sentiments in the markets, with the overall mood more or less stable, especially since trading activity has been livelier compared to the previous week.

The Chinese billet market has hit a ceiling this week. Ex-China billet prices were supported early this week, but, after some easing of futures prices and a weakening of sentiments, the small gains seen earlier were rolled back. Demand for Chinese billet persists but, even though the local market has softened a bit, the allocation for the export market is not so big, which will prevent export prices from declining in the near future. The SteelOrbis reference price for ex-China billet is at $480-490/mt FOB by the end of the week, the same as last Friday. 

The Indonesian mill has started to offer billets for September shipment, while the offer price has remained at $490/mt FOB. Most market sources agree that most August allocation billets have been traded or “promised” to some Asian traders, as there is no demand for August shipment from end-users in most outlets. Traders see the Middle East as a good destination for the next couple of months.

Indian billet sellers have accelerated their export sales. Export tenders held by RINL aggregating 90,000 mt of prime concast billets were closed late last week. Two lots of 30,000 mt and 30,000-60,000 mt were sold at $477/mt FOB and $482/mt FOB, respectively. One of them (30,000 mt) was for Sri Lanka, while the other was taken by a trader for the GCC market, specifically for the UAE. RINL has opened another tender for 30,000 mt of 150 mm/200 mm billet for the export market with shipment in mid-July. However, exports margins have been improving this week, following a large mill closing a deal on Monday for 30,000 mt at $485/mt FOB for delivery to Oman. The higher export activity in India has been due to the decline in the local market - billet trade prices have lost INR 1,000/mt ($10/mt) to INR 43,700/mt ($457/mt) ex-Mumbai. 

Activity in the import billet market in Southeast Asia has also improved this week with more buyers showing interest in purchases, understanding that there will be no rollback in prices in the near term. A few deals at higher levels have been confirmed, but some buyers are still resisting and keeping their bids stable. A deal for 5SP billet has been reported at $514/mt CFR to the Philippines, which is up from sales at slightly below $500/mt CFR in late April. Some market sources said they believe this was for 130 mm billet, which usually has an extra of $3-5/mt compared to 150 mm. Last week, most offers for 5SP 150mm billet were at $505-510/mt CFR, so a deal indicates that the increase has finally been accepted by some buyers. Another deal for Chinese 3SP billet has been heard at $507/mt CFR, also to the Philippines, though most other buyers in Southeast Asia, from Thailand and Indonesia, are trying to push for $500/mt CFR. 

In Turkey, most trade has been seen this week in the domestic market where integrated producer Kardemir has announced sales at $530/mt ex-works for S235JR and $540/mt ex-works for B420 and succeeded in selling close to 115,000 mt in a short period of time. In the Iskenderun region, most offers were at $555-560/mt ex-works and a small deal was closed at $563/mt ex-works, most probably for more prompt delivery. In the Izmir region, one of the suppliers has kept its indication at $580/mt ex-works, in line with its latest export sales.

Import offers from China were mainly at $535-540/mt CFR, settling at $532-535/mt CFR at the end of the week, with lots mainly for July shipment. Malaysia is not giving any firm offer at the moment, while Indonesia has started offering for September shipment, which is of no interest to Turkish buyers. Ukraine is also out of the market due to limited allocation and being focused mainly on European customers. 

The allocation from Russia and Donbass has also been somewhat limited lately, mainly due to one of the largest sellers taking its time to offer for the next round of bookings. Smaller lots have been offered at $512-515/mt CFR and up to $520/mt CFR for closer shipments. Generally, the material is available for June. The SteelOrbis daily reference price for ex-Russia billet is set at $485/mt FOB, versus $480-485/mt FOB seen earlier.

In the GCC, interest in import billet is still observed with offers reported this week mainly at $533-540/mt CFR and slightly above, depending on the port of discharge. According to sources, two 30,000 mt lots were sold to UAE and Oman from India at $483-485/mt FOB which is around $535/mt CFR. Another Indian 30,000 mt lot is said to be destined to Saudi Arabia’s King Abdullah port at a similar or slightly higher price. Locally, there are almost no billet offers across the GCC, with only some induction furnaces in Saudi Arabia offering at SAR 2,100/mt ($560/mt) CPT.