Global View on Billet: Shaky rebound seen in Turkey, declines continue in Asia

This week, prices in the global billet market have been moving in different directions depending on the destination. While in Asia the downtrend has continued, given the weak steel prices in China, in Turkey, following some cautious rebound in the scrap segment, billet prices have improved a little. However, for now the uptrend in Turkey is shaky and market sources believe that only with positive changes in the sales of finished steel can confidence in the billet market increase.  

This week, prices in the global billet market have been moving in different directions depending on the destination. While in Asia the downtrend has continued, given the weak steel prices in China, in Turkey, following some cautious rebound in the scrap segment, billet prices have improved a little. However, for now the uptrend in Turkey is shaky and market sources believe that only with positive changes in the sales of finished steel can confidence in the billet market increase.  

By the end of the week, the billet market in Turkey has started showing some signs of optimism, supported by a slight rebound in import scrap prices and some movement in the rebar segment. The latest offers for small and medium tonnages from Russia and Donbass have been reported at $470-475/mt CFR and up to $480/mt CFR for nearer shipment dates within August. Buyers’ bids were at $450/mt FOB early this week, but, according to sources, later on the workable price levels have inched up to $460-465/mt CFR for small tonnages. Suppliers generally comment that the market has improved slightly, but the trend still lacks confidence. For the same reason, Turkish buyers hesitate to conclude deals actively. There has been a 3,000 mt cargo reported to have been sold at $495/mt CFR Zonguldak for immediate shipment. However, this price is widely considered to be an exception in the market.

Based on most billet offers , bids and estimated workable price levels in the Turkish market, the SteelOrbis daily reference price for ex-Russia billet to be shipped from the Black Sea has settled at $440-445/mt FOB, up $7.5/mt since late last week.

Prices for ex-ASEAN billet have, as expected, retreated this week after a short-lived increase. Falling local prices and weak futures prices in China together with very limited demand still even though the weather conditions improved have put pressure on prices in Southeast Asia and have ended the uptrend, at least for now. Offers for 3SP/5SP billets from the leading Indonesian mill have been reported at $505-510/mt FOB, down by $5-10/mt from the official offer levels last week. There have been reports of some deals done at $500-505/mt FOB for 3SP billet, but it cannot be confirmed by the time of publication. Though there have been no official offers, indicative ex-Malaysia billet prices have also been assessed at $505-510/mt FOB. The reference price for ex-China 3SP billet has settled at $495-510/mt FOB, down by $7.5/mt on average from late last week, which makes ex-China origin billet the most competitive in the region for now.

Prices for imported billet in Southeast Asia have softened again this week as both mills and traders have been giving discounts, trying to accelerate sales. The SteelOrbis reference price for imported billet (3SP and 5SP, ex-EAF or BOF) in Southeast Asia has settled at $510-520/mt CFR, down from $520-525/mt CFR last week. Offers from traders for 5SP billet to the Philippines have slipped to $520/mt CFR this week, from $520-525/mt CFR last week. But some sources report that traders’ prices for position cargoes have already been voiced at $515/mt CFR or so. There was a deal signed by a Malaysian IF-based producer to Indonesia for 10,000 mt of 3SP billet at $500/mt CFR last week, though some sources believe that the final price was slightly below this level.

Prices for ex-Russia billet, shipped from the Far East ports of Russia, have declined this week, in line with the general market trend. Overall allocation from Russia to Asia has not been so big recently, but weak demand has been putting pressure on offers. Late last week and early this week, a deal for 100 mm billet from the main mill in Russia’s Far East region was signed at $490/mt CFR for October shipment to Thailand. Usually, 100 mm billet is discounted compared to the most popular 130-150 mm billets in the region, by at least $10/mt. After this deal, traders have started to offer ex-Iran billet at a lower level, with a rumor about a sale at the same $490/mt CFR level being heard, but this has remained unconfirmed by the time of publication. Offers for 150 mm billet from the same Russia mill have also declined to Taiwan, being reported at $510/mt CFR, versus $517/mt CFR late last week. But “bids are at $500-505/mt CFR now,” a trader said. 

The ex-Iran billet export billet business has been slow lately, which is partially due to limited availability during the high-priced electricity season domestically. In addition, some suppliers are less eager to export due to the earlier imposed export tax (two percent). This week, there was a tender announced for 30,000 mt for delivery in first half of October, with a closing date of August 13. While the previous deals had been closed at $455-462/mt FOB depending on the steel grade, the new levels are expected to be at $440-450/mt FOB. In the UAE, the latest offers for ex-Iran billet have been reported at $490-495/mt CFR, while in Asia traders have started collecting bids a $490/mt CFR Thailand, following a deal at $500/mt CFR to Indonesia, down $5/mt from the initial offers. Some Iranian suppliers have mentioned there is a chance that the government will abolish the export tax for semis, following mills’ successive meetings with the authorities.

Indian government-run steel producer Rashtriya Ispat Nigam Limited has floated an export tender for 30,000 mt of 150 mm steel billet for shipment by September 30, company sources said on Friday, August 11. Ex-India billet prices have been stable at $505-520/mt FOB. Even though the local billet market has mostly stopped going up, trade volumes have remained “healthy” and another surge is likely as some of the larger mills are shut until the end of the month for maintenance works, leading to a tightening of supplies for merchant sales. An Odisha-based mill is heard to have concluded a small tonnage trade with a trader at $500-505/mt FOB and, while no confirmation of the deal is available, at least two in trade circles said that a deep discount at a net price below the $500/mt FOB mark could not be ruled out.