Despite huge drop in international billet prices, US billet market has stayed more or less the same from a month ago with slow demand and adequate supply.
Most rerollers have long term supply deals from billet suppliers in the US, indexed to scrap price changes. Therefore, domestic billet prices followed US shredded scrap to come down slightly in June. Currently, US billet prices range from $565 to $575/mt ($513 to $522/nt). Although there is adequate billet supply, billet demand is still slow and there is hardly any billet purchasing activity to be seen in the market due to the lukewarm economy. Re-rollers' inventory level remains the same and it is not expected they will purchase a significant amounts of billet in the near future unless there is improvement on the US finished products market. These prices are significantly higher than international levels and the billet pricing should follow and trend down in the upcoming weeks.
On the international market, billet prices observed a significant drop of more than $100/mt from last month. In the past week, CIS billet was in the level of $420 to $430/mt FOB Black Sea ports and Turkish billet ranged at $450 to $460/mt FOB.
Total billet imports into the US in June (as of June 22, 2010) were 15,893 mt, representing a decrease of 7,138 mt when compared to the figure of 23,031 mt in May. The main countries that exported billet to the US during the period were: Mexico, at 10,922 mt; and Canada, at 3,749 mt. Brazil and Japan also exported a smaller amount of billet to the US during the corresponding period.
The latest USITC data show that the total amount of US carbon billet exported in the month of April 2010 was 89,191 mt, which represents a significant increase of 79,914 mt when compared to the figure in March. The main countries that imported US carbon billet in April were: Dominican Republic, at 73,429 mt and Peru, at 11,750 mt. Other countries that imported smaller amounts of US carbon billet include Canada and Taiwan.