Global View on Billet: Prices rise indicatively only in Asian region, down elsewhere

- An upward trend has been seen in the billet market in Southeast Asia and China this week, supported by rises in futures prices, positive sentiments, and the previous good sales concluded by major suppliers. However, in the most other major billet outlets prices have posted further declines and the overall mood is still bearish. Sluggish demand has been seen in the overall global market. 

- Chinese billet exporters have increased prices first to $480-500/mt FOB and later to $490-520/mt FOB by the end of this week, becoming uncompetitive again with only some traders with long positions able to offer attractive prices for ex-China or ex-ASEAN billets. The possibility of China resuming more active exports by the end of this year is still looming as market sources state that local demand in China is entering the off-season. The average local billet price in China has added around $10/mt in the first half of the week, which with the appreciation of the RMB against the US dollar has made the increase in the dollar equivalent of tradable prices for imported billet to China even bigger - to $450-455/mt CFR, from $430-440/mt CFR. But overall demand has not been strong, with prices just rebounding from excessively low levels.

- ASEAN billet producers have also become less aggressive in the export market this week, mainly because they sold volumes to traders and end-users last week. Around 30,000 mt of ex-Vietnam BF 150 mm 5SP billet are reported as having been sold to Southeast Asia at $505-508/mt CFR. A part of this volume has already been traded to an end-user in Indonesia, according to market sources, while another part is still held by the trader. After that, most offers for ex-ASEAN 5SP billet have been reported at $520/mt CFR or even above. In addition, there has been information that a deal for 10,000 mt of ex-Indonesia BF billet was done to Thailand at $505-510/mt CFR early last week.

- Prices for imported billet in Southeast Asia have also increased over the past week, though demand has stayed weak and buyers have not supported the current uptrend, at least so far. The SteelOrbis reference price for imported billet in Southeast Asia has risen by $7.5/mt over the past week to $510-520/mt CFR (the lower end corresponds to 3SP prices and the higher end to 5SP prices). The lowest offer price has been reported to the Philippines for ex-Vietnam IF billet at $505/mt CFR. But some sources believe that overall offers for IF are very limited. Traders were selling at $490-505/mt CFR over the past three weeks or so, so for now restocking is over. At the same time, 5SP billet, which is more popular in the Philippines, has been offered from China and Southeast Asia to this destination at $520/mt CFR. Some sources said that it is possible to get $515/mt CFR for this grade from Chinese sources, who probably have positions, but again no deal has been reported for this grade due to very weak demand.

- Breaking a prolonged period of inactivity, Indian billet exporters have started to show some interest in export sales as local prices have been showing continuous drops. But since the international market experienced a strong downtrend and has now started to increase mostly indicatively, export trading activity is still poor. The tradable level for ex-India billet has moved to $480-490/mt FOB this week, from $480-500/mt FOB in the previous weeks and there have been rumors that at least two Indian mills have concluded modest-volume trades, but this has not been confirmed.

- Workable billet prices in the Turkish market have softened over the past week under pressure from uncertain scrap and weak rebar pricing and sales. The number of firm billet offers in Turkey has been scarce this week since some Asian sellers have stepped back, while ex-Russia allocation has remained very limited. According to market sources, Turkey would pay $520/mt CFR at the highest, while some bids are as low as $510-515/mt CFR for ex-Russia and ex-Donbass, and down to around $500/mt CFR for Iranian origin. Most Russian suppliers find the mentioned range unprofitable and only a few of them may consent to sell at this price, specifically to compensate buyers for the deals they closed earlier at much higher prices. Apart from Russia, there are offers from Vietnam at $528-535/mt CFR, while no fresh prices have been heard from Indonesia and Malaysia. According to estimations, Algeria has been in the market at $525-530/mt CFR, negotiating with a few customers. The domestic billet market in Turkey has been dull with barely anyone offering. The estimated price level is now standing at $565-575/mt ex-works, up slightly over the past week.

- Billet importers from the GCC region have been also reporting offers from Asia, coming to the UAE and Saudi Arabia at $525-538/mt CFR from Vietnam and Indonesia. The level of $520/mt CFR is considered workable in Saudi Arabia, though no fresh deals have been concluded. In the UAE, ex-Asia offers may be considered only if there is a lack of supply. For now, this market is dominated by ex-Iran billet, which is on offer at $490-500/mt CFR this week.