Unlike most regions in the international billet market, US billet conditions remain soft and the market has not seen any price improvement in recent weeks.
With the sluggish longs market in the US, re-rollers continue to refrain from purchasing billet in efforts to keep their inventories at low levels through the end of the year. US re-rollers are waiting to purchase billets until they see improvement in the finished long steel markets, which hasn’t occurred yet and is not expected to take place until early next year. Therefore, the US billet market is expected to stay around the current level for the rest of this year. However, as with US longs prices, US billet prices are thought to be at or near the bottom and may start to trend up again as soon as January due to the current US scrap price trend.
As US shredded scrap prices have decreased approximately $25/long ton ($24.61/mt) in the beginning of November, US billet prices have followed suit and reflected a downward movement as well. Currently, domestic billet prices are in the range of $395 to $405/mt. However, US scrap prices are now projected to undergo a modest gain in December, which may help US billet prices recover slightly in the first month of the New Year.
Meanwhile, international billet prices have shown an upward trend in the last week due to the up-tick of scrap purchasing activity and prices from Turkey in the beginning of the month. CIS producers are now offering billet at $420 to $425/mt CFR for December shipment, while local Turkish billet prices are standing at the level of $430 to $440/mt ex-works (excluding the 18 percent VAT), which represents an increase of approximately $25/mt from the end of October.
The total amount of billet imports into the US in October 2009 was 23,995 mt, representing an increase of 11,530 mt from September. The main countries that exported billet to the US during October were: Mexico, at 17,361 mt; and Canada, at 6,533 mt. Other countries that also exported billet to the US in smaller amounts during the period were United Kingdom and Japan.
On the export side, the latest data from the United States International Trade Commission (USITC) show that the total amount of US carbon billet tonnage exported in September 2009 was 33,515 mt, which represents a significant increase of 28,157 mt when compared to the figure of 5,358 mt in August.