Global View on Billet: Trading slows down, but positive moods spread everywhere

This week has been slow in terms of billet trading in almost all major markets. Asian buyers and Chinese traders have been absent due to the Lunar New Year holiday and the expectations for the next two weeks are strongly positive. Moreover, the Turkish market, which posted some declines earlier, has stopped moving down and some cautiously optimistic moods have been prevailing for the future.

The Turkish square billet market has been rather active this week in terms of domestic sales, while the import segment has been slow, after previously closed deals. The domestic price range for billet in Turkey has remained relatively unchanged over the past week at $620-645/mt ex-works depending on the region. In fact, the latest sales have been concluded by the integrated producer Kardemir at $620-625/mt ex-works for around 45,000 mt. In addition, the same level was fixed this week for 6,000 mt in the Iskenderun region. Offers in the Marmara region have been set at $645/mt CPT, while in the Izmir region a small lot was traded at the same price, but on ex-works basis.

In the import segment, the volume of the available allocation has remained low, mainly due to the absence of the Asian suppliers and rather high indicative prices from both the GCC region and Asia. Russian origin billet has been mainly on offer at $580-595/mt CFR depending on the supplier and the lead time. At the end of the week, there has been information regarding a 5,000 mt booking at $570/mt CFR Izmir, but it has not been fully confirmed by the time of publication. Sources believe that, even if done, the deal should be for ex-Donbass material only.

The SteelOrbis reference price for ex-Russia billet is at $555-565/mt FOB Black Sea, increasing by $5/mt from late last week. In terms of offering, Russian mills have not been too active either, expecting a better situation from February. The reference price has been increased, based on offers and market indications, though no deals have been reported this week. The tradable level in North Africa for ex-Russia billet has been assessed at $580-590/mt CFR at the highest in some countries, with offers at above $600/mt CFR. From next week, competition in the billet market will increase as Asian traders, who took positions with ex-ASEAN billet from mills before the Lunar New Year holiday, will come back. But market sources expect them to target the GCC market, Southeast Asia or Latin America more.

This week has been silent in the Southeast Asian billet market due to the Lunar New Year holiday, the absence of active offers from Chinese traders and slow interest from buyers. At the same time, most market sources believe that billet prices will keep going up from next week and the only concern is how big the increase could be. Both traders and mills have been inactive in offering billet in Southeast Asia this week and market sources believe that traders will start offering at above $600/mt CFR next week, while mills will be more aggressive, asking closer to $650/mt CFR. The current tradable level for 5SP billet in the Philippines has been assessed at $600/mt CFR. Some sources expect at least a $20/mt hike next month, taking into account the awaited strong return by China and bullish ASEAN-based mills. But some market sources expect milder price increases in the region from next week if Vietnamese suppliers are flexible.

Ex-India billet prices have reached $565-575/mt FOB, up by $15/mt from last week’s $550-560/mt FOB. A government-run mill which held an export tender for 20,000 mt of billets during the past week reported receiving the highest bid of $570-575/mt FOB. There has been no information whether the mill accepted the bid, but some market sources said that the contract was closed by the end of the week. This price is definitely higher than the previous bids, though the targeted price level was above $600/mt FOB. However, no new export tenders have been floated by government mills, while a few private mills put limited offers for spot sales overseas. An Odisha-based integrated mill has concluded a spot sale with an Asian buyer at $565/mt FOB, the sources added.

At the beginning of the current week, a few cargoes of ex-Iran steel billet were reported to have been sold at $544/mt FOB BIK, totaling 50,000 mt. Although the price is in line with those levels which were actively discussed a week ago as the prices targeted by suppliers, some traders remain quite sceptical on the outlook for future developments. Furthermore, given the uncertain information regarding sales to end-users, the positions of Iranian steel billet sellers have remained quite shaky. An ex-Iran billet sale to Indonesia was discussed at $585/mt CFR, with the freight being estimated at around $38-40/mt, though it has yet to be confirmed by the time of publication. Apart from that, a 20,000 mt cargo of ex-Iran billet has been booked at $575/mt CFR to the GCC region, up around $25-35/mt from the levels in the previous deals.