Global View on Billet: Downtrend seen in all major markets; buyers cautious in purchases

- This week, a downtrend has started in all major markets, in line with expectations. The decline in prices in Asia has been sharper than in the MENA region, though more declines are possible in the latter in addition to those seen in the previous week. Demand in most major outlets has been limited as buyers have been cautious in making purchases in the falling market and the situation in the scrap market is still uncertain.  

- Major ASEAN and Chinese mills have announced a sharp cut in billet export offers, trying to push some volumes after weeks of slow demand. In general, prices have lost $15-20/mt. The leading Indonesian mill is reported to have sold two lots of around 20,000 mt each of 150 mm 3SP billets at $600-605/mt FOB to traders. Last week's offers from this mill for the same grade were at $620/mt FOB, having been stable for a few weeks. In general, traders have been cautious in taking positions from mills even though prices have dropped, as the downtrend may continue and end-user demand could be insufficient to absorb even these prices. According to some sources, these lots may be offered to Turkey and Europe, with the freight assessed at $30-40/mt and $45/mt or slightly above, respectively. Offers for ex-Indonesia 130 mm 5SP billet have been reported at $610/mt FOB, down from $630/mt FOB reported earlier, but no deals have been reported so far.

- Ex-China billet prices have also fallen this week amid the weakness in the local market, and the drop in futures and raw material prices. The SteelOrbis reference price for ex-China 3SP billet has been settled at $590-600/mt FOB, down by $20/mt on average from last week.

- Prices for imported billet in Southeast Asia have fallen in two separate rounds this week. New offers for 5SP billet, mainly from Chinese traders for position cargoes of ex-Indonesia and ex-China billet, have been reported to the Philippines at $615-620/mt CFR, while the previous bookings for IF billets were at $625-630/mt CFR and for ex-Vietnam EAF they were at $635/mt CFR Manila. This week, only one deal for a position cargo of 10,000 mt of 5SP Indonesian material was done at $620/mt CFR in the first half of the week. But by Thursday, demand has almost come to a halt with bids dropping to $610/mt CFR. The SteelOrbis reference price for imported billet in Southeast Asia has been settled at $615/mt CFR by the end of this week, down $20/mt from last week.

- In Turkey, most business activity has been seen in the domestic market this week. The integrated mill Kardemir announced $670-675/mt and managed to sell up to 40,000 mt on the same day. Following this trade, local billet prices in Turkey slid to $670-690/mt ex-works, $15-20/mt down week on week. In the import segment, trade has been extremely slow this week but the market has been full of rumors regarding the low-priced $600-620/mt CFR deals from Russia which have not been confirmed. Chinese billet indications were reported at $630-635/mt CFR. Alternative origins, mainly from India and Malaysia, are on offer at $645-655/mt CFR and above, which is not considered workable. 

- The SteelOrbis reference price for ex-Russia billet started to decline from early this week, losing $10/mt in total to $585-605/mt FOB Black Sea. Deals for 16,000 mt in total of ex-Russia billet for March shipment were done to Turkey at $625-628/mt CFR late last week. The FOB price translates to around $600-603/mt. Deal prices for prompt shipment Russian material have lost $7-8/mt from the previous contracts reported in the middle of last week. Also, small-lot sales from Donbass were closed at $610-615/mt CFR. In addition, there has been information in the market about 20,000 mt of ex-Donbass billet sold at $620/mt CFR to Turkey, corresponding to around $590/mt FOB, and then rumors of a $600/mt CFR sale emerged, though none of them have been confirmed by the time of publication. For larger lots of ex-Russia or some other origins, offers slipped to $630-635/mt CFR, but with no new deals reported.  

- This week, Iranian steel producers have remained mostly inactive due to the Persian New Year (Nowruz) celebrations which started on March 21. Nevertheless, early this week an Iranian steel mill is said to have closed its billet tender for 30,000 mt of steel billet at $567/mt FOB, with shipment in the middle of May. Besides, information about another sale of ex-Iran steel billet at $576/mt FOB, reportedly done on Saturday, March 18, has surfaced in the market, though it still needed to be confirmed by the time of publication. Traders have voiced offers for ex-Iran billet in Turkey at $580-590/mt CFR, while indications in Southeast Asia have been at $595-600/mt CFR, with no interest from end users.

- Ex-India billet prices have showed signs of slipping after several weeks of increases as sellers cut prices to revive sluggish sales and with buyers deferring trade in key Asian and Middle Eastern markets. Ex-India tradable billet prices have been reported at around $580/mt FOB compared to $595-605/mt FOB last week, with at least two private mills heard to be offering discounts for all bookings above 20,000 mt under a single supply contract. Sentiments have turned more bearish amid unconfirmed reports that an export offer for 30,000 mt floated by a government mill and slated to close on March 23 has received just three bids from buyers and an indication of lower-than-expected price realizations, while the closing date was not extended. The mill’s previous tender was closed at $600-605/mt FOB, as reported last week.