Global View on Billet: Trading improves in some outlets, prices still in narrow range

Price fluctuations in the global billet market have been limited this week since, after some rises in China early this week, prices retreated later. On the raw material side, scrap prices are unchanged, while coke and coking coal prices have continued to rise amid a lack of supply. So, major Asian sellers have been trying to at least keep prices for billets stable, and some customers have been more eager to buy, believing that prices will not fall any time soon.

The SteelOrbis reference price for ex-China billet reached its highest level at $445-460/mt FOB on Tuesday, up by $5/mt since late last week. Most offers from large Chinese traders were at the higher end of the range. Early this week, coking coal futures at Dalian Commodity Exchange recorded a maximum rise and broke the RMB 1,300/mt mark. In addition, the Tangshan administration announced that production cuts would be implemented between August 16 and September 3. It was stated that some cuts would occur depending on weather conditions until August 25, and that production would be suspended between August 25 and September 3. In total, daily steel output is expected to be reduced by 90,000 mt. But by Friday, Chinese prices have lost all earlier gains and settled at $440-450/mt FOB. Some deals have been done at the lower end of the range. 

The leading Indonesian mill has announced billet offers stable at $455/mt FOB, but they are for November shipment, which is too early for the main customers.

Buying of import billet in Southeast Asia has somewhat accelerated this week, but buyers have been focusing on purchases of discounted IF billets, material from sanctioned countries, or have been asking for prices which are up to $5/mt lower from China. A deal for 30,000 mt of 5SP 150 mm Vietnamese IF billet has been reported at $465/mt CFR Manila over the past week, as most offers for 5SP billet from China have been heard at $470/mt CFR and above early this week. In addition, 30,000 mt of 5SP 150 mm Iranian billet have been sold to Indonesia at $458-460/mt CFR. But China’s billet prices have softened quite significantly by the end of the week, so for Iran most bids will be not above $450-455/mt CFR in the near future. Apart from this sale to Indonesia, a smaller tonnage of Chinese 5SP billet is heard to have changed hands already at $465/mt CFR Indonesia. The main Russian seller has been targeting $460/mt CFR in Taiwan. 

Billet trade in Turkey has been a bit fragmented this week with still little attention given to most ex-Asia cargoes due to the long delivery terms. The prices have been relatively stable with little potential to increase in the near future and with little chance of finding acceptance since the import scrap in Turkey is still unchanged while rebar trade has been unsatisfactory to modest depending on the segment. Local billet is still more or less favored although the number of deals has been limited this week to Kardemir’s sales of 35,000 mt at $500/mt and $510/mt ex-works depending on the grade, stable from the previous round of sales. Otherwise, in the other regions, billet buyers have been cautious against offers of $500-505/mt ex-works Izmir and $508-510/mt ex-works Iskenderun due to workable rebar prices being at $540-555/mt ex-works roughly.

Import offers from China have been at $485/mt CFR mainly, slightly down over the past week and, according to buyers, $478-480/mt CFR levels may be possible in the case of serious inquiries. Ex-Malaysia offers have been mainly reported at $495/mt CFR for October shipments of 150 mm billet, while Indonesian material is estimated at around $490/mt CFR. Ukraine has been offering $490/mt CFR with the workable levels estimated by buyers to be $5-10/mt lower.

The SteelOrbis reference price for ex-Russia billet has changed minimally since last week and stands at $440-442/mt FOB Black Sea, up by just $1/mt on average. Import offers to Turkey have been reported at $465-470/mt CFR, with bids at $455-460/mt CFR still, with the latest deals closed at $462-463/mt CFR and slightly lower. The price level is considered workable against Kardemir’s sales in Turkey at $500-510/mt ex-works, since Russian material normally has to be at least $30/mt lower to attract attention. However, the main question is the evaluation of buyers’ needs to restock at the moment. A few re-rollers in the Karabuk region, however, have been looking for billet, players report. Aside from Turkey, there has been talk about a $450/mt FOB ex-Russia sale, presumably to Egypt, but only if it was for wire rod grade with extras included.

Ex-India billet prices have been stable in the range of $440-450/mt FOB. However, sellers, especially large domestic first-tier mills, were heard to be declining bids at the lower end of the range and anything less than $450/mt FOB was not being considered as sellers were buoyed by the revival in prices of long products and semis. A government-run mill which had floated an export tender for 30,000 mt received a highest bid of $438/mt FOB, but no confirmation was available from the company regarding whether a deal was concluded, with market sources claiming that the tender had been “rolled over”, with the deadline for the submission of new bids set for August 20, the sources said.