Global View on Billet: Uptrend strong mainly in Turkey, Asian market still weak

Upward price trends have prevailed in the global billet market this week, as expected after the rises in scrap prices. But the strongest rises have been seen in Turkey and for ex-Russia billet prices, while most Asian markets have remained weak due to poor finished steel demand and more flexible ASEAN-based suppliers.

- Prices for square billet in Turkey have increased before the Feast of Sacrifice holiday, during which the market is expected to be silent in terms of negotiations for around a week. Moreover, some players expect higher billet offers to be seen in the middle of July with the support of the positive import scrap situation and an improved rebar market. Indeed, the offers for premium scrap have increased and are foreseen to remain solid for now. Local and export rebar prices have increased to $700/mt and above, and Turkish mills seem to be not under much pressure for now as they had traded significant volumes starting from the second half of June.

- As for billet, import offers in Turkey have been mainly coming at $600-610/mt CFR and up to $630/mt CFR, though the number of active negotiations has been scarce. Earlier this week, there was an offer from a Russian mill at $570/mt CFR, while at the end of last week a deal was closed at $10/mt lower. Basically, the market expects to see the workable level for billet after the holiday, but as of now buyers are cautious since the price increase has been quite rapid, up from around $530-550/mt CFR seen last week. In the domestic market in Turkey, billet offers are even higher, at $670-700/mt ex-works and they are clearly not workable, at least at present. Turkey’s export offers are at $675-690/mt FOB and once again these levels are not acceptable, at least in North Africa, which is the main sales region for Turkish mills. LINK for today’s article

- The stronger Turkish market has pushed up ex-Russia FOB prices, which have surged from $500-505/mt FOB last week in a few separate movement to $540-550/mt FOB. This level has not been fixed in deals so far, though rare official offers from suppliers are at even higher levels already, i. e., at $560-580/mt FOB Black Sea.

- At the same time, the price hike attempts of some billet suppliers in Southeast Asia last week failed entirely and import prices have resumed their softening this week. A deal for an ex-Indonesia 3SP billet (10,000 mt according to preliminary information) has been signed to Taiwan at $570-572/mt CFR in the past week. An offer for ex-Russia base billet has been heard at $575/mt CFR from one seller, which has been assessed as relatively high for the current market, while another offer for ex-Russia vanadium-added billet was at $585/mt CFR Taiwan. Moreover, some sources report that bids for imported base billet from Taiwan have dropped further to $550/mt CFR already.

A contract for Indonesian 5SP billet was reported at $580-585/mt CFR as done late last week. At the moment, material of the same grade and origin is available at $580/mt CFR Manila, and some traders can give even $570/mt CFR in a short position. This means that the reference billet prices in Southeast Asia have lost $10/mt over the past week, which has been reflected in lower offers and deal prices.

- Though the tradable prices for imported billets in China have increased by $10/mt over the past week, the sharp fall in the local market in China last weekend and the negative outlook for the near future due to heavy rainfall have turned sentiments mostly bearish again. Offers for ex-Russia billets to China have been reported at $560/mt CFR, up from the previous levels of $550/mt CFR and below. The tradable level is assessed at $530-540/mt CFR, but reflects the workable price mainly for eastern China, while for the northern part of China bids are hardly above $510-520/mt CFR, according to sources.

- Positive movements in ex-Russia billet prices have led to cautiously optimistic sentiments in the Iranian billet market. This week, there were three new export tenders opened by Iranian mills with the results yet to be seen. Iranian steelmaker SISCO has opened an export tender for only 20,000 mt of steel billet. SJSCO is reported to have floated an export tender for 30,000 mt and ESCO has offered 30,000 mt of billets. The sellers’ expectations are at around $500-510/mt FOB, versus $490-500/mt FOB last week. Nevertheless, the attempts of suppliers to increase their offers to Asia could face difficulties, with apparent demand still insufficient, especially at higher price levels.

- Indian billet export activity has continued to remain quiet with lower price offers by some sellers not matching bids and mills not pushing overseas sales strongly amid the recovery in prices in the local market. Some mills’ ex-India billet prices were heard at $550-560/mt FOB, while bids received were lower at $520/mt FOB at the highest from Asian buyers. No deals or new tenders have been reported over the past week.