Global View on Billet: Market rather stable and activity slow as winter is coming

Both price changes and market activity have been limited in the global billet market this week due to weak demand and the rather high costs of major mills. Also, the stabilization in China has influenced the international market, though some hopes for a rebound, seen earlier, have almost faded away.

Offer prices for ex-Asia billet increased early this week amid gains in Chinese futures prices, but they declined a bit later, so, in total, ex-China reference billet prices added just $2.5/mt on average over the past week. The ex-China billet price is at $425-430/mt FOB, with most offers at the higher end of the range. As for the fundamental supporting factors, there was the obvious decline in steel production amid some mills’ need to fulfil annual targets, the slow demand, and the environmental inspections at mills. But it is difficult for prices to go up sustainably, with no demand support.

The leading Indonesian mill has increased its January shipment offers by $5/mt from last week to $435/mt FOB, while its slab price has been voiced at $448/mt FOB, for February shipment.

In Southeast Asia’s import market, offers for import billets in Southeast Asia have increased by $5/mt this week, but most buyers are not in a hurry to purchase, believing that prices will soon roll back. Most offers for Asian 5SP 150 mm and 130 mm billets have been at $450/mt CFR and $455/mt CFR in the Philippines. Though last week's deals for 5SP 150 mm billet were heard at $445/mt CFR, a few deals for 5SP were heard at $450-455/mt CFR in the Philippines for Chinese and Vietnamese origin. Also, a contract for 3SP was rumored at $438/mt CFR in the Philippines last week, but this week a deal was rumored for this grade at $447/mt CFR. Offers for 3SP billet have been officially at $445-453/mt CFR in Thailand and Indonesia, but no deals have been reported so far.

In the GCC, the local workable price has dropped by $5/mt over the week to $480-485/mt CPT fixed in deals in Oman and the UAE for a total of 30,000 mt. In Saudi Arabia, the domestic billet price is at around $475/mt CPT, again $5/mt down compared to mid-November. Import offers from China are at $457-462/mt CFR and higher, and are not considered workable. The latest deals were closed at $453/mt CFR around a fortnight ago.

Ex-Iran billet is still at $395-415/mt FOB depending on the supplier, with a few rumors being heard about deals at $417/mt FOB from one of the main suppliers. In the UAE and Oman, ex-Iran billet is at $535-440/mt CPT, but is not so workable at the moment.

In Turkey, local billet trade has been active mainly in the Iskenderun region, with at least 50,000 mt sold in the past week in the range of $507-514/mt ex-works. However, some sources have reported deals at as high as $519/mt ex-works, for prompt shipments. Import offers from China have been standing at $464-470/mt CFR with no serious negotiations heard since buyers’ ideas hardly exceed $455/mt CFR.

The SteelOrbis reference price for ex-Russia billet stands at $435-437/mt FOB Black Sea, just slightly down from $435-440/mt FOB last week. In general, the market is assessed as stable with low trade activity. Late last week, a small-volume ex-Russia deal was done at $455/mt CFR to Turkey, translating to $435/mt FOB.

Ex-India billet offers have been kept stable in the range of $420-430/mt FOB with at least two Odisha-based mills heard to have quoted higher at around $440-450/mt FOB, perceiving prices in Asia may rebound soon. However, with local sales improving both in terms of trade volumes and prices, large mills have not been giving discounts to push overseas sales, the sources said. Local billet trade prices have surged INR 600/mt ($7/mt) to INR 38,300/mt ($432/mt) ex-Mumbai.