Despite some slight up-ticks in
US longs prices, the
US billet market remains slow with weak demand and plentiful supply among re-rollers.
Though the
US longs markets have been looking a little firmer in recent weeks, demand for these products still generally remains depressed, and
longs production is still at low levels (under 50 percent capacity). Thus, re-rollers are still not interested in returning to the
billet market yet and will continue refraining from
billet purchases until they see a marked improvement in their finished product demand.
As
US scrap prices are expected to trend sideways in June as compared to May,
US billet prices will likely follow the same trend and remain at May levels of $375 to $385 /mt FOB mills. It is expected that
US scrap prices may go up in July because of low domestic
scrap supply. If the
scrap price increase does happen next month, then
US billet prices would likely go up by a similar amount. However, if the finished product prices do not improve similarly, this would narrow the profit margin for re-rollers.
Internationally, however,
billet prices are trending slightly up due to the mild up-trend of
scrap and
longs prices in some international markets. This week the
CIS region (former Soviet Union) is offering 3SP-5SP grade
billet in the range of $375 to $380 /mt FOB, which shows an increase of approximately $15 /mt from a week ago. Turkish
billet export prices are also trending upward with the increase in the
rebar export offering prices. Turkish
billet offers are at the level of $400 to $415/mt FOB on actual weight basis. However, similarly to the
US market,
longs demand in the international markets is lackluster at best due to the global recession, so the current up-trend in international
scrap and
billet prices will probably remain somewhat subdued.
The total amount of
billet imports into the
US in May 2009 was 3,328 mt, which represents a decrease of 4,877 mt from April. The main countries that exported
billet to the
US during May were:
Mexico, at 1,815 mt and
Canada, at 1,050 mt.
Belgium, the United Kingdom and
Japan also exported small amounts of
billet tonnage to the
US during the month. However, the
US Department of Commerce’s Steel Import Monitor shows that the amount of
billet imports is increasing in June, with a total of 6,897 mt as of June 10, 2009.
Mexico is the main
billet exporter to the
US in June thus far.
On the export side,
US billet shows a significant decrease in April. The latest data from the United States International Trade Commission (USITC) show that the total amount of
US carbon
billet tonnage exported in April 2009 was 2,929 mt, reflecting a sharp decrease of 26,011 mt from March. (There was a large
billet cargo to
Morocco in March consisting of over 26,000 mt.)
Brazil was the main
US carbon
billet export destination in April, importing 1,403 mt from the
US. Other countries that received smaller tonnages of
US carbon
billet during the period include
Canada,
Singapore, and
Venezuela. In May, several traders worked hard to book tons to the
Far East as the regional price gap allowed for some significant
US export orders. The prices the
US mills were asking for were from $355 to $375 /mt FOB stowed Gulf Coast ports.