Global View on Billet: Price fluctuations small as supporting factors fail to change weak fundamentals

This week, the global billet market has been supported by the uptrend in the Turkish scrap segment and the increase in futures prices in China in the middle of the week, following the Chinese government’s announcement of an easing of monetary policy for 2025. However, these factors have been insufficient to support billet spot prices and the overall bearish mood has not disappeared with fundamentals being weak.

The mood in the Asian billet market improved early this week after China announced a “moderately loose” monetary policy for 2025. The ex-China reference price has moved up to $450-460/mt FOB as most offers have been heard at the higher end of the range. But market sources still see the tradable levels as hardly being above $450/mt FOB, seeing futures again posting a decline by the end of the week. Trading of billet from China has been limited this week and may resume only if prices keep falling, to at least $440/mt FOB next week, according to market sources.

ASEAN billet exporters have been focusing on distant markets and have mainly been keeping offers stable. For instance, late last week a trader took a position from the Indonesian mill at $455/mt FOB. On Monday, December 9, the offer was reduced to $450/mt FOB and it returned to $455/mt FOB again on Tuesday, December 10. In addition, there has been a rumor that a trader took a cargo from Malaysia at $470-475/mt FOB to cover the previous short position sale to Turkey, but it has not been confirmed by the time of publication.

The downtrend in Taiwan’s import billet market has continued even despite the slight rebound in China. Lately, the market has been fully dominated by Russian billets, which have been much cheaper than Chinese or ex-ASEAN billets. The latest deal for ex-Russia billet that will be shipped from the Far Eastern ports of Russia has been reported to Taiwan at around $435/mt CFR, while the previous bookings from the same supplier were done at $443/mt CFR late last week and at $450/mt CFR in late November. According to market reports, just over the past two weeks the seller has managed to sell 100,000 mt of billets to Taiwan. The latest offers from China and the ASEAN region are equivalent to $470-480/mt CFR Taiwan.

Offers for import billet have increased in Southeast Asia this week, and some ex-ASEAN offers have become the most competitive in the region, but demand has been minimal. In the Philippines, the lowest offer for 130 mm billet has been reported for ex-Vietnam IF billet at $475/mt CFR. At the same time, ex-China 5SP 150 mm offers have been at $480/mt CFR at best, versus $468-475/mt CFR last week. But no new deals have been reported so far with traders saying that demand for IF billet in the region is limited. Also, for BOF 5SP billet buyers will not accept above $470/mt CFR, sources said. In Thailand and Indonesia, offers for 3SP 150 mm BOF billet have been at $470-475/mt CFR, increasing by $10/mt from last week.

Turkey’s billet market has been relatively stagnant this week especially in the import segment, since mills were not in a position to restock particularly in large lots, while import scrap has rebounded slightly and the situation in China was remaining uncertain. During the week, ex-Asia offers, including China, Indonesia and Malaysia, were at $490-495/mt CFR mostly, slightly down on the upper end over the past week. Some sellers have reportedly been fishing around for Malaysian origin with offers at as low as $485/mt CFR, with no positive response from buyers. The workable level for large cargoes from Asia is now evaluated at not above $480-485/mt CFR since captive billet production costs in Turkey are estimated at $495-500/mt. In the domestic market, integrated mill Kardemir announced its billet price at $500/mt ex-works for S235JR and $525/mt ex-works for S420 steel grade, up $5/mt from the previous sales. The supplier managed to sell 37,000 mt of billet on the same day and closed its sales. In addition, in the Iskenderun region of Turkey small deals for 5,000-7,000 mt in total were closed this week at $525-527/mt ex-works, sources reported.

The SteelOrbis reference price for ex-Russia billet has settled at $440-445/mt FOB Black Sea, up by $5/mt from last week. Rare offers have remained at $440-450/mt FOB, but trading has been limited. Also, some sellers have not been voicing new offers so far, waiting for the market to settle. This week, Turkish buyers’ price ideas have increased from $435-450/mt CFR to $460/mt CFR, which is in line with the previous small-volume deals.

Iranian billet exports have been rather silent this week in terms of fresh tenders and the workable level is still evaluated at $450-455/mt FOB, which is, however, not workable for most destinations except the Middle East. This week, the Central Bank of Iran made an announcement amending the currency exchange policy for exporters, allowing them to use a more advantageous agreeable rate instead of the previously fixed, low governmental rate. According to local sources, this aims to support exporters in several industries, including steel, while the government seems to be short of foreign cash. This development is expected to support ex-Iran exports, especially providing support to mills during the period of tighter gas supply. However, the price situation in the global markets is rather pessimistic and the current prices for ex-Iran billet, for instance, have no chance of acceptance in Asia.

Ex-India billet prices from large mills are indicatively at $480-490/mt FOB and, even though large mills have not been submitting offers, they are in no rush to adjust them to drive sales overseas. Smaller mills are still ready to test $455-460/mt FOB, but no active negotiations have been held. The Indian reference price has remained stable at $450-460/mt FOB, while local prices have also been stable week on week.