Global View on Billet: Trading more active in major outlets with minimal price changes

Trading of billets in most major sales destinations has been a bit more active over the past week as some buyers have been eager to replenish stocks ahead of the holidays in Asia, also given the lack of purchases in the previous few weeks. In addition, the rather stable price conditions (only a small increase seen in Turkey and limited discounts in Asia) have made importers more confident about signing deals.

Prices for ex-China billet have remained stable over the past week. While early this week some traders were voicing offers at a few dollars higher ($440/mt FOB and above) due to the appreciation of the Chinese currency, the decline in futures prices and lower bids have resulted in small discounts by the end of the week. In general, the ex-China billet reference price has been fluctuating in the range of $435-440/mt FOB this week. Some mills have started to lower production in advance ahead of the Chinese New Year holiday, which has resulted in some decline in the allocation of billets for the export market. The yuan has appreciated with the mid-point exchange rate of the PBOC at $1 = RMB 6.959 on February 5.

An Indonesian mill has kept its billet offers stable at $455/mt FOB, but discounts of $5/mt have been available by the end of the week. Still, buyers are fully focused on other origins, viewing prices from the ASEAN region as being too high. At the same time, the Indonesian producer increased its slab offer by another $5/mt to $470/mt FOB.

In Southeast Asia, limited restocking has been seen recently ahead of the Chinese New Year holiday, while buyers have still been looking for discounts. A deal for 30,000 mt of Chinese 5SP 150 mm billets has been disclosed at $455-457/mt CFR early this week, which is almost in line with expectations as the tradable level was at $455-460/mt CFR since last week. Some sources say that the final price was $455/mt CFR at the highest. Also, a deal for 5,000 mt for Chinese 3SP was signed last week at $457/mt CIF Thailand for early March shipment. Only necessary restocking has been seen for Chinese billets in the Southeast Asian region as discounts from sellers have been very small.

At the same time, after a long pause ex-Iran semis trading has resumed in Asia. In total up to 50,000 mt of Iranian semis (20,000 mt of billets and up to 30,000 mt of slabs) have been sold to Thailand lately, with the billet price heard from the market at $440-445/mt CFR. In addition, there has been a rumor that last week 40,000 mt of ex-Iran billets were sold at $448/mt CFR, but this could not be confirmed by the time of publication. In the large-volume deals done to Asia, ex-Iran FOB billet prices have been assessed at around $405-413/mt, according to the market.

In Turkey, billet prices are under pressure from sliding rebar prices and generally low sales of longs in both the local and export markets, while import scrap prices remain relatively strong. While the workable rebar prices are at $540-565/mt ex-works depending on the region, domestic billet is mainly at $500-510/mt ex-works, stable over the past week. The $495/mt ex-works levels seen last week in Kardemir’s deals, are not yet available from other mills in Turkey due to high production costs at EAF-based facilities. Import offers from China have been reported mainly at $475-479/mt CFR for April shipments, while buyers’ targets would hardly exceed $470-472/mt CFR. Malaysian and Indonesian offers have remained indicative at $510/mt and around $495/mt CFR, respectively, for shipments in April and beyond.

Ex-Russia billet offers are standing at $470-475/mt CFR in most targets as the Russian suppliers aim to take advantage of their short lead time and the somewhat limited availability of billet in the market in general. In particular, some Asian mills are inactive in offers to Turkey and at present there is basically only China, which will soon leave for its holiday period. In the meantime, Ukraine is out of the market due to certain production issues due to Russia’s ongoing military strikes. Overall, Russian mills are not so aggressive currently, partially due to their still unfavorable exchange rate. Some Russian sellers, including a large mill, managed to trade billet to Turkey at $462-468/mt CFR for March shipment, while the indicative offers to Egypt were reported at $475/mt CFR. The SteelOrbis ex-Russia billet reference price stands at $442-450/mt FOB Black Sea with the midpoint at $446/mt FOB, inching up by $3.5/mt.

In the GCC, the billet market has been generally stable with allocation locally being limited, specifically in the UAE and Oman. The main reason is the high rebar pricing and active demand and so many prefer rolling billets instead of selling them. The latest indicative price stood at $515/mt CPT from Oman to the region for March deliveries, but currently the mill is reported not to be offering. In Saudi Arabia, the local billet price is at SAR 1,900/mt CPT or $507/mt CPT, up slightly over the past two weeks. Import offers from Asia to the GCC have been set at $475/mt CFR to Saudi Arabia and slightly lower to the UAE and Oman, with the latest deal closed to Saudi Arabia for 50,000 mt. Ex-Iran sales have been resumed with the general level of offers standing at $395-420/mt FOB depending on the mill, production route, the size of the order and cargo readiness. The latest offers to the GCC have been reported at $445-450/mt CFR, while a 40,000 mt deal to Asia was closed last week at $448/mt CFR, translating to around $413-415/mt FOB. In the latest sale for a combined billet and slab cargo to Thailand, the billet was priced at $440-445/mt CFR, translating down to $405/mt FOB.

Ex-India billet offer prices have been kept unchanged at $445-450/mt FOB, but most large mills have paused submission of offers, following bids at $430-435/mt FOB which were considered to be unviable by most sellers. According to the sources, markets in the Middle East are heard to be either fully stocked or buyers have been deferring deals, expecting a new price trend to emerge after the long holiday ahead in China. As for sellers, despite a correction in the local semis market, mills are optimistic regarding a revival of demand for construction grade steel and a recovery in local billet prices.