Global View on Billet: Markets unmoved, price increase in early January unlikely

Prices for billets in most major markets have been rather stable in late December, and buying has slowed down ahead of New Year holidays. Some hopes for price increases for the first half of January have faded away for now as weak demand in Asia and the Middle East is likely to persist.

Ex-China billet reference price has been at $430-440/mt FOB this week, just $2.5/mt higher compared to last week, with most offers still remaining at $435-440/mt FOB. The Indonesian mill has slightly lowered its April shipment offer by $2/mt from late last week to $440/mt FOB. But most buyers assess the workable level at not above $430/mt FOB. The outlook for the Chinese billet market for early-January is stable as from one side stronger local currency and some expected production cuts will give some support and prevent any declines, but weak demand will not allow prices to rise. But some hopes exist for later January, and prices may go gradually up locally in case of demand improvement ahead of the Chinese New Year.

The tradable level for Asian 5SP billet in the Philippines has been assessed stable at $450/mt CFR, in line with deals done earlier this month. At the moment offers are mainly at $455-460/mt CFR with no interest from buyers mainly amid sufficient stocks. As for 3SP billets, buyers from Thailand and Indonesia are targeting $440-445/mt CFR.

In Turkey, billet trading activity has been rather slow, resulting from the declining prices and sales in the rebar segment. As a result, billet buyers, who had also restocked quite well previously, prefer to wait and see. The local billet sellers are also under not much pressure to conclude deals and prefer to wait for the clarification of the situation in the rebar segment. The domestic prices are at $505-510/mt ex-works Izmir, $510-515/mt ex-works Iskenderun and $515-520/mt CPT in the Marmara region. However, a small lot has been sold in the Iskenderun region at $517/mt ex-works for prompt delivery.

In the import segment, ex-China billet has settled at $475/mt CFR average for February shipments while the buyers are rare and the idea of the workable price is closer to $465/mt CFR. Therefore no deals have been reported. No solid import offers from Indonesia and Malaysia have surfaced this week considering the long lead time for these origins. Ex-Ukraine billet was on offer at $490-505/mt CFR depending on the buyer, but the bids were at least $15/mt lower from rare customers, which was not acceptable for the sellers.

The number of offers for billet from Russian ports has remained limited, partly due to the unfavorable exchange rate, but also due to some sales, closed in the previous weeks. The indication for the Turkish market stands at $460/mt CFR, for Egypt – at $470-475/mt CFR. The SteelOrbis reference price for Russian billet has settled at $435-440/mt FOB Black Sea, almost in line with the past week.

In the GCC, the import offers for billet from Asia have been reported at $472-475/mt CFR KSA and $475/mt CFR to the UAE and Oman, while the buyers’ price idea is mainly below $465/mt CFR. Local billet in Saudi Arabia is at $483-488/mt CPT, while an Omani mill’s latest offers stood at $500/mt CPT for the local and Emirati buyers, up from $480-485/mt CPT sales, closed over a month ago. Iranian billet exports remain subdued with the FOB levels standing at $395-415/mt FOB for EAF billet, but in the UAE and Oman the offers are at 440-450/mt CPT and above. No business activity has been reported taking into account ECAS restriction specifically in the UAE.

Ex-India billet offer prices have largely been kept stable in the range of $435-440/mt FOB, while at least two large mills are reported to have submitted lower offers at near $430/mt FOB, but no deals were confirmed even at these levels. Meanwhile, in the local market, billet merchant trade prices have gained INR 1,000/mt ($11/mt) to INR 40,600/mt ($451/mt) ex-Mumbai.