Global View on Billet: Trade war results in decreases everywhere, but further fall questionable

This week, billet prices in most major markets have posted significant declines, triggered by the escalation of trade wars, falling raw material prices and weak sentiment globally. Buyers have been more eager to purchase at lower levels, but market sources have no common view of the future trend as some of them believe that prices may be close to the bottom, at least for some time, as there are hopes for local demand improvement in China. Meanwhile the decent drop in scrap prices this week may push tradable billet prices down further in the MENA region.

Starting from Monday, Chinese billet export prices have declined due to falling steel futures prices and iron ore prices sliding below the $100/mt CFR mark, following the escalation of US-China trade tensions. First the US and then China announced tariffs on each other of over 100 percent this week. As a result, by Wednesday, Asian billet prices hit their lowest level since September 2024. The ex-China reference price fell to its lowest level at $422.5/mt FOB on average on Wednesday. A few traders confirmed that, when offers were at $425/mt FOB, an undisclosed volume was purchased by traders at around $5-10/mt below that level.

An Indonesian mill cut its billet price to $428/mt FOB on Wednesday from $430/mt FOB early this week and $440/mt FOB last Friday. There has been some talk that some direct sales from the mill to end-users have taken place at $425/mt FOB, but this has failed to be confirmed by the time of publication. But by the end of the week, the mill has pulled back its offer to $435/mt FOB for June shipment. Prices for ex-Asia billet improved on April 10 amid rises in steel futures prices and the improved mood in the market in general after the unexpected move by the US president to postpone the enforcement of country-specific reciprocal tariffs.

The SteelOrbis reference price for import billet in Southeast Asia has settled at $440-450/mt CFR, down by $5-10/mt over the past week. At least two deals have been discussed at $445/mt CFR for 150 mm 5SP billet and at $450/mt CFR for 130 mm 5SP billet to the Philippines. Though there has been no confirmation that the deals have been finalized, market sources agree that this is the current workable level and some sales will happen before prices rebound again. On April 10, some offers have already been voiced at $5/mt higher. Chinese 3SP billet was at $440/mt CFR in Indonesia on Wednesday and $445/mt CFR later this week, while some sources from Thailand have even reported $450/mt CFR.

In Turkey, billet prices in the domestic market have weakened from $500-530/mt over the past week to $500-520/mt ex-works with the higher end seen in the Izmir region and the lower one belonging to Kardemir. In fact, Kardemir announced stable prices at $500-510/mt ex-works depending on the grade and managed to sell close to 35,000 mt of billet, which means that buyers chose to restock. However, the price level is considered to be on the high side since by the end of the week scrap prices have fallen sharply. Accordingly, next week Turkish mills are expected to cut their prices for billet and longs, even though their costs of production are forecast to increase by $4-5/mt due to the recent rise in energy tariffs. The drop in scrap prices, however, is more significant and will drag steel prices down as is widely expected in the market.

In the import billet segment in Turkey, price levels have also fallen, particularly for Asian billet, from $475-485/mt CFR to $463-468/mt CFR in offers by the end of the current week, especially for Chinese and Indonesian semis. Moreover, while local billet production costs in Turkey still exceed $530/mt for EAF-based mills, at least two mills have decided to book billet from China at $457-460/mt CFR for end-of-June delivery for the usual 40,000-50,000 mt lots. Malaysia has been absent from the market this week with firm offers, and the estimated price indication is around $475-478/mt CFR at the end of the week, traders report.

The ex-Russia billet reference price has settled at $445-450/mt FOB Black Sea, down by $5/mt from the previous day and down $10/mt since late last week. But, in general, the number of offers has remained limited and the price has been indicative, based on the tradable level in the Turkish market. The depreciation of the Russian currency to $1 = RUB 86 from $1= RUB 84 last week has not been enough to support the majority of sellers, according to market sources. But with the drop in scrap prices on Friday, Russian mills will have to cut offer prices if they want to grab some sales, according to market sources.

The ex-India billet reference price stands at $420/mt FOB this week, compared to $425-435/mt FOB a week ago, but the price is largely indicative as most private mills have refrained from submitting offers, not expecting deals to mature because neither sellers nor buyers know how much the tariff challenges will upend trade and impact prices negatively. The sources said that a spot sales negotiation between an eastern India-based integrated mill and an Asian buyer for 30,000 mt was terminated after the buyer pulled out of the talks, citing “unviable pricing”.