Global View on Billet: Uptrend continues in Asia and mood strong, but decline seen in Turkey

- The global billet market has posted two different trend this week. Overall moods, prices, deals and expectations have been positive in Asia and most buyers have left the market ahead of the Lunar New Year holiday, waiting for higher prices to be achieved in the next round. But in Turkey, following the drop in scrap prices, prices for both local and import billets have declined. Market sources have different views on the development of the market in the next few weeks - some believe these diverse trends will continue, while some think that the downtrend in Turkey will not last too long. 

- The latest deal for ex-Vietnam 5SP billet has been reported to the Philippines at $595/mt CFR, which is up from bids at $580-585/mt CFR last week. Some other negotiations with a trader for ex-ASEAN billet have been held at $590/mt CFR, but there has been no confirmation about a signing of a deal by the time of publication. A trader from the Philippines said that he believes that bids are at $600/mt CFR at the highest now in the country, versus general offers at $630/mt CFR.

- New offers from Indonesia’s Dexin Steel have been announced at $620/mt FOB for the standard 3SP grade from the beginning of this week, up from $600/mt FOB seen late last week. Some sources believe that they can agree at $600/mt FOB for March shipment, as this level has not been accepted yet in the market. The previous deals from Dexin to traders were heard at $580/mt FOB for standard 3SP billet after $565-570/mt FOB reported earlier last week. The mill signed one contract at $590-600/mt FOB to a buyer in the local market but for SAE1008 wire rod grade billet, as SteelOrbis heard.

- After long negotiations, at least 20,000 mt of billet from Russia’s Far East region (or more) were sold to Taiwan at $585/mt CFR by the end of last week. Market sources said that the material probably contains higher vanadium content, and so the price is around $15/mt above the base billet reference price. Nevertheless, this signals a strong increase compared to the previous levels, as before leaving for the holidays Russian offers to Taiwan were at $550/mt CFR (for vanadium-added material). Buying from Russia was reasonable for Taiwanese buyers as cheaper offers for ex-Iran billets have dried up and ex-ASEAN offers have been increasing too rapidly. A trader who took an ex-Indonesia billet position earlier offered to Taiwan at $600/mt CFR. New offers from Russia for April shipment billets are at $590/mt CFR. Despite the rise of the tradable level of imported billet in China to $515-520/mt CFR, this level has been not workable at all.

- Information about an ex-Iran tender closed in the range $540-550/mt FOB has remained unconfirmed by the time of publication. The recent offers of ex-Iran billet to Thailand at $580/mt CFR may mean that the sellers have just evaluated the workable prices for buyers, without any apparent bookings yet. By the end of the current week, another Iranian billet mill claimed to have bids on the table at $560/mt FOB. However, given the information above, the producer appears to be speculating on the tightness of supply, exerting pressure on potential buyers with overpriced offers.

- Indian mills have managed to achieve some deals at higher levels in the spot export market over the past week and the target prices in new tenders have increased to $600/mt FOB and above for new deals, though this has still been too high to be accepted. The SteelOrbis’ reference price for ex-India billets has reached $550-560/mt FOB, up from $525-540/mt FOB last week. The sources said that, while government mills currently have ongoing tenders aggregating 70,000 mt, one private seller concluded a trade for 20,000 mt at $550/mt FOB. An Odisha-based private mill is heard to have concluded a deal with a Singapore-based trading firm at $560/mt FOB, indicating that higher offers are being accepted across the Asian and Gulf markets, the sources said.

- Turkish billet market prices have rolled back this week, following the rather confident rebound seen previously. Asian and GCC suppliers have been manly out of the market, having either stepped back from active offering, or having increased their offers to levels which are not workable in Turkey. However, since a lot of buyers in Turkey had restocked previously with import and domestic billet, the interest in imports has been lower this week. As a result, the workable price level for import billet, especially for toxic ex-Russia cargoes, stood at $560-565/mt CFR earlier this week and, according to sources, one of the sellers accepted such a bid for 10,000 mt. However, by the end of the week, ex-Russia and ex-Donbass billet indications have inched up to a minimum of $570-575/mt CFR and a large Russian mill has been offering at $590-595/mt CFR. The highest offers have been coming for small ex-Russia prompt shipment cargoes at $605/mt CFR, versus $590-597/mt CFR in the supplier’s previous deals.

- In the domestic market in Turkey, the workable level has been settled at $620-640/mt ex-works depending on the region, down by around $15-20/mt. The integrated producer Kardemir traded up to 20,000 mt at $635-640/mt ex-works this week, while in the Iskenderun region a $640/mt ex-works sale was followed by a $620-625/mt ex-works transaction.  

- The SteelOrbis reference price for ex-Russia billet has increased slightly to $550-560/mt FOB, up by $10/mt on average from $530-560/mt FOB reported earlier in the week. But still down by $5/mt on average over the past week due to declines seen in Turkey. Some improvement by the end of the week happened mainly owing the lower freight rates, while also the very low prices reported from some Russian suppliers have been not seen in the market anymore. According to market sources, the larger lots of up to 20,000 mt can have freight rates to Turkey at $20/mt or just a few dollars more, while the freight from Russia for smaller lots of around 5,000 mt is at below $30/mt now. Previously, the average freight rates from the Black Sea were at $30-38/mt depending on the volumes.  

*The weekly change is calculated compared to $580-600/mt CFR, which was the tradable/offer level for 5SP last week. The higher end of the range last week was mistakenly at $620/mt CFR, but was for a higher grade billet deal.