Global View on Billet: Trading improves with firm pricing seen in major outlets

Prices for billets in most major outlets globally have been firm this week, so some traders and end-users have been more eager to buy, especially considering there are no expectations for a price decline soon.

The ex-China billet reference price has settled at $425-435/mt FOB, up by $5/mt from late last week, with most offers standing at the higher end of the range. Market sources said that a few large Chinese mills have been quoting billet at $435-438/mt FOB, but traders may provide $4-5/mt discounts on these levels. The main reason behind the stronger offers has been recent production cuts and plans for lower output in December as well. In particular, there have been heavy pollution weather conditions, triggering yellow/orange alerts in Jiangsu Province since November 22 and November 24 to November 27, which required enterprises to halt production and suspend transportation of coal, coke and other bulk materials. At the same time, demand locally has also weakened and the raw material prices are standing at a rather high level, which will keep prices stable in the coming weeks. 

There has been talk about a few sizable-volume deals for ex-Indonesia and ex-China billet over the past week. A deal for 50,000 mt of ex-Indonesia billet has been heard at $432/mt FOB, stable from what was reported earlier this week and $3/mt lower than last Friday. The deal was for February shipment and now the mill is offering March shipment billet at the same price level. Most large traders confirm that they hear this deal was done to Turkey, but market sources said that it may be for a long position as the CFR price has not been finally confirmed by the time of publication. Also, some traders were in negotiations for ex-China billet for Turkey at $430/mt FOB. In addition, the latest large booking for ex-China billet to the UAE has been heard at $457-458/mt CFR. Market sources agree that the deal was done before this week, since for the current market traders would insist on above $460/mt CFR.

In Southeast Asia’s import billet market, buyers have been willing to make purchases, but demand has been for January-early February shipments only. The tradable level for 5SP billets in the Philippines is still at $450/mt CFR, versus offers at $450-460/mt CFR. Chinese origin 3SP offers have been mainly at $450/mt CFR in Thailand, and only some traders have given $445/mt CFR for this grade in Indonesia. There are no cheap offers for Iranian billets, according to market sources. Iran is not offering below $445/mt CFR, so buyers are avoiding purchases. 

Local billet prices in Turkey have settled at $510-525/mt ex-works depending on the region, and, following last week’s deals in the Iskenderun region at $507-519/mt ex-works depending on the tonnage and the mill, this week Kardemir sold over 50,000 mt at $515/mt and $525/mt ex-works. Higher rebar prices at $565-590/mt ex-works have made it possible for billet sellers to increase their workable prices.

In the import segment, by the end of the week the market has been talking about billet sales of around 20,000-30,000 mt from Indonesia at the level of $432/mt FOB or close to $475/mt CFR for February shipment. “Normally this level is not so logical against lower Chinese billet offers, but it makes sense if the tonnage is less than 50,000 mt or if it is a part cargo,” a market source told SteelOrbis.

Chinese offers stand at $465-470/mt CFR for end-of-January shipments, while the indications for Malaysian billet have been evaluated at around $490/mt CFR. Ukraine has been offering at the similar levels - $490-495/mt CFR, for the same shipment term.

The SteelOrbis reference price for ex-Russia billet stands at $435-440/mt FOB Black Sea, up slightly from last week’s levels of $435-437/mt FOB. The latest workable prices in Turkey have been set at $455-460/mt CFR, up slightly from the previous $455/mt CFR level. There has been talk about a 5,000 mt billet sale from Donbass at $428/mt FOB, which is evaluated as being a somewhat low level by the time of publication. Overall, most mills in Russia are not willing to go below $430-433/mt FCA in export sales.

Ex-India billet reference prices have increased to $430-440/mt FOB, up by $5/mt on average over the past week, with some bookings reported, signaling improved market conditions, while there had been hardly any trades over the previous two to three weeks. For example, a government-run eastern India-based integrated mill held a tender for 30,000 mt of prime concast billet, receiving the highest bid at $435/mt FOB, the sources said. Similarly, an Odisha-based mill reported a spot sale of 20,000 mt to a trader at around $430/mt FOB.