Will LME billet delisting have an effect on the US market?

Friday, 14 December 2012 18:09:08 (GMT+3)   |   San Diego
       

Although the total cancelation of the LME billet contracts in the US will take over a year to complete, sources tell SteelOrbis that the recently-announced delisting might have more than a negligible effect on the US billet market.  Specifically, many are wondering what will happen to all the billet currently sitting in US warehouses--while the LME eluded to the possibility of sending the billet to "available warehouses" (presumably in Europe and the Eastern Mediterranean regions, where the remaining contracts will be located), the cost of transporting the material might be prohibitively high.  If the LME decides to unload US reserves instead, perhaps at bargain-basement prices, it could prove to be unwanted competition for US mills.

Already, US mills are reportedly trying to keep billet prices from falling below current levels of $515-$525/mt FOB mill--a decrease of approximately $25/mt in the last month.  As it is, prices are running virtually level to Russian offerings, while billet prices from Asia are riding the uptrend wave along with other steel products--current Asian offerings have been heard around $570/mt CFR.  However, planned shutdowns during this quarter in the US are helping keep availability relatively tight, and expectations of a scrap price surge in January will also help US mills hold on to current billet prices.


Similar articles

Global View on Billet: Pessimism grows again due to weak China, slight hike attempts in Turkey

29 Mar | Longs and Billet

RINL floats export billet tender for 30,000 mt for early May shipment

29 Mar | Longs and Billet

No halt to downtrend in SE Asia’s import billet market, more traders going short

28 Mar | Longs and Billet

Ex-Asia billet offers become more affordable in Turkey, market slightly optimistic

27 Mar | Longs and Billet

Ex-India billet prices stable, but buyers try to push below $490/mt FOB

27 Mar | Longs and Billet

Ex-ASEAN billet sales continue at low prices, China turns negative again

26 Mar | Longs and Billet

Global View on Billet: Better sentiments, suppliers fail to achieve higher deal prices so far

22 Mar | Longs and Billet

Turkey’s Kardemir issues planned sales volumes for April-June

22 Mar | Steel News

Import billet prices in SE Asia hit new low, trend reversal anticipated

21 Mar | Longs and Billet

Domestic billet sales livelier in Turkey, import price range narrows amid limited allocation

21 Mar | Longs and Billet