Global View on Billet: Asian market falls in negative mood, while ex-Black Sea prices up

The trend in the global billet market has been uneven this week with prices in the Asian market being from stable to down and moods have definitely turned to bearish. However, ex-Black Sea billet suppliers have achieved higher prices amid rises in steel prices in Egypt and cautiously positive sentiments in Turkey.

Turkey’s domestic billet market has been pretty sluggish recently, partly due to the lack of offers since the mills’ costs of production have been quite high and the import prices have shown a certain increase. However, since the billet offer indications are quite high, the buyers are also not much keep on buying billet domestically and even increased their price ideas for the import material by the end of the week. The integrated Kardemir has announced billet sales at $585-595/mt ex-works but has managed to trade only around 30,000 mt and the sales have remained opened. This signals about a not very healthy situation in the domestic market. The other billet suppliers in Turkey have been targeting $590-600/mt ex-works minimum, though with not many takers reported.

In the import billet market of Turkey, offers from India and Indonesia have been at $555/mt and $565/mt CFR, respectively, while an ex-Malaysia cargo with a shorter lead time has been offered at $575/mt CFR. In addition, several market sources have reported a 10,000 mt position cargo from Algeria has recently changed hands at $560/mt CFR for early March shipment, which is in line with the previous trades.

As for the minor lots of ex-Russia and ex-Donbas billet, the Turkish buyers’ price idea has climbed to $550-555/mt CFR from the previous $535-540/mt CFR, however, no fresh deals have been reported. Previously, up to 30,000 mt had been reportedly traded by a large Russian mill at $535/mt CFR, which was considered a low price for this material, while the initial offers were at $540-545/mt CFR.

In Egypt, according to a few sources, from 30,000 mt to 50,000 mt of Russia billet have been sold at $525-535/mt FOB, while the latest CFR based deal has been fixed at $555/mt CFR and the offers are expected to climb to $560-565/mt CRR for 3SP and $570/mt CFR minimum for DWR grade.

This week, the asking price by Donbas-based mills has been as high as $535/mt FOB while the latest deal for 11,000 mt has been closed at $525/mt FOB. In addition, a few offers from Russian producers have been at $540-550/mt FOB for March shipments, which is not yet workable in both Turkey and Egypt. The SteelOrbis reference price for ex-Russia billet to be shipped from the Black Sea has settled at $525-535/mt FOB, $17.5mt up over the week.

New offers for 3SP billet from the major Indonesian mill slightly increased by $5/mt to $535/mt FOB early this week, but the tradable level remained at not above the latest deals and market sources are seeing the increase as nominal and not reflecting the market conditions. Last week, 60,000 mt of billets were traded by this mill for March shipment at $530/mt FOB, which is in line with the previous sales mainly done at $528-532/mt FOB and one exceptional sale at slightly above $535/mt FOB. These volumes were booked by traders for long positions. Offers from Malaysia are scarce and mills have focused on slabs offers. One trader has a position cargo bought earlier from the Malaysian producer: it is offered at $575/mt CFR to Turkey. The latest sales for up to 100,000 mt of slabs from the leading mill in Malaysia were done at near $580-585/mt FOB to Turkey, while for Europe the price is $610/mt FOB and higher.

The ex-China billet reference price lost $7.5/mt on average over the week to $525-535/mt FOB due to the futures drop, weakening local demand ahead of holidays and lower raw material prices, iron ore in particular, which has fallen below $130/mt CFR mark. The local billet price has settled at RMB 3,628/mt ex-warehouse, going down by RMB 55/mt ($8/mt) over the week.

Sentiments in Southeast Asia’s import billet market have also worsened significantly this week as most buyers have decided to postpone purchases and cut bids, seeing the weakening of the Chinese market. Offers for ex-ASEAN 5SP IF billet have come back at around $535/mt CFR, though the price ideas of sellers for this material were at $540/mt CFR last week. But even such prices have failed to attract buyers with bids at hardly above $530/mt CFR. Official offers for ex-ASEAN and ex-India 130 mm and 150 mm billets have been at $550-560/mt CFR, relatively stable over the past week, though, taking into account weak demand and new lower Chinese offers, the tradable level has already been at $540-545/mt CFR for sellers.

In Iran, the suppliers have been targeting higher export billet prices, most probably counting on some potential upturn of the GCC markets, Egypt and Turkey. In the meantime, the situation in Asia remains rather dull and Iranian billet finds no wide acceptance there, at least for now. Currently, the first-tier mills in Iran are targeting to sell billet at $490-500/mt FOB and even slightly above versus $485-495/mt FOB earlier. There have been rumors in the market about a $30,000 mt sale at $505/mt FOB, but the sources report it might have been for the material with price extras. In addition, there are two tenders now floating, one for 10,000 mt by a smaller mill and another one for 30,000 mt by one of the key suppliers. In Turkey, the ex-Iran billet offers have been reported at $525-530/mt DAP Karabuk region versus buyers’ price idea of $515/mt DAP, SteelOrbis has learned. In addition, in Egypt the offers for Iranian billets have been voiced at around $550-555/mt CFR, around $10-15/mt up since the second half of January. In the GCC, the offers have increased to $530/mt CFR from $520-525/mt CFR. In Asia, Iranian billet prices have remained stable over the week at $530/mt CFR with no takers reported so far.

Ex-India billet offer prices were maintained, but with more deals were signed at higher levels compared to last two weeks. This prompted more local mills to put up more offers for overseas sales. Ex-India billet offers were submitted in the range of $525-535/mt FOB, but unlike earlier weeks, when acceptable price ranged $510-515/mt FOB, sellers were able to secure deals at $520-525/mt FOB. The sentiments received a boost following a government mill concluding a spot sale of 20,000 mt at $525/mt FOB, an improvement over the highest bid of $510/mt FOB seen in last tender. An eastern based mill reported a trade for 20,000 mt for Asian destination at $520/mt FOB, the sources added.

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