Global View on Billet: Bullish Asia spreads positive mood, buyers in some regions resist

Positive sentiments have gained ground in the global billet market this week amid the stronger Chinese market and higher ex-ASEAN prices. This has been a long-expected development, but, except for some traders taking positions and moderate demand in the MENA region, buyers in some destinations have been resisting the current uptrend so far.

Ex-ASEAN 3SP billet offer prices reached $500/mt FOB early this week, up from the previous asking price of $490/mt FOB. Early this week, market sources reported a deal for up to 30,000-50,000 mt of 3SP billet done at $490/mt FOB from Indonesia, up by $3-10/mt from the previous three deals heard in the market and reported last week. In addition, ex-Malaysia semis are reported to have been sold at $495/mt FOB, versus $500/mt FOB targeted in last week’s offers, while the cargo amounted to 50,000 mt. Market sources believe that these materials will go to Turkey or Egypt. Moreover, another deal for a bigger volume up to 50,000 mt has also been reported from the ASEAN region at $500/mt FOB, but for a different grade, 4SP, according to some sources. This means that the price includes a $4-5/mt extra minimum. Some sources believe that the extra is even higher - $10/mt - due to the high manganese content sought in billet by Egyptian buyers. Moreover, on Friday, a few traders said that $500/mt FOB is tradable even for basic 3SP with negotiations for June shipment underway and deals next week may even exceed this level if the situation in China continues to be positive.

Ex-China 3SP billet prices have reached $500-510/mt FOB this week, adding $7.5/mt over the past week amid local steel market increases, pushed by better demand and expectations, as well as rises in raw material prices. However, at the moment, the price is mostly indicative and no deals have been done after the large-volumes sales at $470-480/mt FOB earlier this month. “China sold a lot. Now there is no need to push volumes, so only traders are selling previous positions,” a market sources said. Two cargoes from traders were rumored to have been sold before the holiday to Turkey. Some sources believe that one Chinese cargo out of these two was at a slightly higher level than initially discussed, at $522-523/mt CFR, translating to around $485/mt FOB, excluding freight.

Although import billet offers have increased in the Southeast Asian market after the holidays last week amid the bullish market in China and the rises in the export prices of a mill in the ASEAN region, the tradable levels for import billet in Asia have failed to improve and remained at $500-510/mt CFR. Offers for 3SP and 5SP billet have increased to $510-530/mt CFR depending on the market and the supplier, up by at least $10-20/mt from before the holidays. Some traders who took positions earlier from mills at below $490/mt FOB may offer at the lower end of the range - at $510/mt CFR, while offers from mills for June shipment and just recently taken positions are at $525/mt CFR, especially for 5SP. A Russian mill has increased offers to Taiwan to $505/mt CFR, after a sale at $500/mt CFR.

In Turkey, billet trade has been quiet this week, following a couple of sales done before the holiday and disclosed to the market just lately. According to sources, one ex-Asia lot was booked at $515-520/mt CFR Marmara, while an ex-China lot was traded at $522-523/mt CFR. Around two weeks back, the workable prices from China were considered to be down to $510-515/mt CFR and some players assume there could have been bookings at this level as well. However, this week ex-ASEAN billet prices to Turkey are evaluated at not lower than $530-540/mt CFR, while one 50,000 mt cargo is reported to have been sold to Turkey at around $525-530/mt CFR and some additional trades are expected.

As for the Black Sea region, there is still very limited availability and some sellers have been fishing with $530/mt CFR Turkey indications for mid-May shipments, with bids at around $520/mt CFR. The prompt shipment cargoes are at $540-545/mt CFR and some bids at $535/mt CFR are reported to have been rejected. In Egypt, a 5,000 mt billet cargo was traded last week from Russia at $515/mt FOB for prompt shipment. The SteelOrbis daily reference price for ex-Russia billet has been increased by $5-10/mt over the past week to $495-505/mt FOB, with the midpoint at $500/mt FOB.

Iranian billet prices have continued to slide given the pressure from buyers and the relatively unfavorable situation in the key consuming markets. According to sources, one mills has traded 30,000 mt of billet at $471/mt FOB, while earlier this deal was circulating at $470/mt FOB. Before the holiday, the latest workable level had stood at $477/mt FOB, again for May delivery. In addition, a billet offer from Iran to Pakistan for a position cargo has been reported this week at $470/mt FOB. In the meantime, IF billet indications are standing at as low as $410/mt FOB, SteelOrbis has learned. In Turkey, ex-Iran offers are at $507-510/mt CFR, while in the GCC indications are reported at $490-500/mt CFR.

Ex-India billet prices have gained $5-10/mt over the past week, coming to $505-515/mt FOB from $500-505/mt FOB last week. According to the sources, a government mill which held a tender for 30,000 mt and had a deadline on Tuesday (April 16) received the highest bid of $515/mt FOB, compared to a $500/mt FOB bid received for a similar tonnage earlier in the month, boosting market sentiments. There was no confirmation about whether the mill sold at this price or not, but market sources believe that, even if this level looks a bit speculative, the spreading of the information about it in the market has made the market more positive. An Odisha-based integrated mill has reported a trade for 30,000 mt at $508/mt FOB for the Middle East.

* - deal prices