Global View on Billet: Uptrend paused in most major markets except Turkey

The uptrend in most major billet markets globally has stopped this week, except in Turkey, where local prices have posted a significant increase and demand for billets has been firm amid strong scrap prices. Prices may be stable in the near future if there is no dramatic change in raw materials and steel in China.

Early this week, Asian billet suppliers were bullish, but unlike the previous week buyers have been showing more resistance, so, by the end of the week, most offer prices have returned to what was seen late last week. The reference price for ex-China billet stands at $460-470/mt FOB on Friday, slightly corrected from $460-475/mt FOB seen a week ago. One trader confirmed that some firm offers are at $462/mt FOB today or even lower at $460/mt FOB as futures are down and sentiment is weaker due to higher supply. But some traders are staying at $465-470/mt FOB as they see a rather stable local market.

The leading Indonesian mill increased offers by a total of $10/mt on Monday and Tuesday, but then corrected them back on Thursday, seeing no response from customers and a sharp fall in demand. There were no sales after the previous deals to the Middle East - to Oman and the UAE at $485-490/mt FOB last week. At the same time, Indonesian slab and HRC prices are slightly higher week on week as demand for these products is firm and supply levels are not so high, especially for slabs (ex-Indonesia price is at $520/mt FOB).

Prices for import billet in Southeast Asia have stabilized at the level fixed in the previous deals reported last week. But the higher offers heard early this week have disappeared. The tradable level for Chinese 150 mm 5SP billet has been at $490/mt CFR Manila, in line with the latest deal to the leading importer in the Philippines reported a week ago. Trading has faded away due to the holidays. Billet importers in Thailand and Indonesia have received offers for Chinese 3SP at $485-488/mt CFR, stable compared to previous deals, but $2-3/mt below the targeted prices seen early this week. Customers hope to get some discounts and sign the next contracts at $480/mt CFR or below.

Ex-Russia billet offers in Asia have been heard at $480-485/mt CFR in Taiwan and Thailand this week, lower than offers early last week to Taiwan at $490/mt CFR. This signals a worsening mood in general in Asia.

Billet prices in Turkey have increased from around $525-540/mt ex-works at the end of last week to $545-560/mt ex-works currently. The uptrend is based on climbing rebar prices and, even though demand is still lagging behind a little, some business at the higher price level has already been seen. In addition, there are expectations for lower scrap prices in the near future. Some small deals have been closed for billet at $555/mt ex-works in the Iskenderun region, up from $537-540/mt ex-works in deals earlier. The prices in this region may reach $555-570/mt ex-works depending on the rebar situation. A small billet lot was sold in the Izmir region at $560/mt ex-works, while in the Marmara region the price was at $550-560/mt CPT. Turkish producer Kardemir announced $540/mt and $550/mt ex-works for billet in its new round of sales and managed to sell close to 40,000 mt.

Import offers from China have settled mainly at $515-520/mt CFR, with $510/mt CFR also considered possible, for May-June shipments. In the meantime, Malaysian billet has been on offer at $530/mt CFR for May shipment and 10,000 mt were sold at the same level to Turkey’s Iskenderun region. Ukraine has been offering at $530/mt CFR for May shipment, with no takers reported yet.

Ex-Russia billet offers have as expected increased from the earlier reported deals at $478-483/mt CFR to a minimum of $495-500/mt CFR in new offers. Moreover, some targets have been voiced at $505-510/mt CFR for April-May shipments, but these seem difficult to achieve for now. Overall, Turkey is expected to remain interested in Russian origin material since it is currently the cheapest, available for the shortest lead time, and can be booked in small volumes, with no alternative in the region except Ukraine, which is priced much higher. The SteelOrbis daily reference price for ex-Russia billet stands at $465-475/mt FOB Black Sea, up from $455/mt FOB seen at the end of last week.

Ex-India billet prices have been pushed up again over the past week, with large and medium-scale secondary mills citing rising energy costs and the fall in availability of domestic scrap supplies, but trade has been muted by buyers’ caution as regards accepting higher prices, compounded by higher freight rates. Offers have increased by an average of $10/mt to the range of $480-490/mt FOB, but most buyers are looking for prices not above $460-470/mt, FOB and it is hard to make a deal when availability from China is stable and traders may be flexible.