Billet Market Overview: Recent price changes for week 20, 2024

In general, price declines have been witnessed in the most major markets globally this week since, even though in general availability is not high, buyers have been insisting on discounts, pointing to the slight softening of scrap prices and insufficient steel demand. However, some positive news has emerged in China by the end of the week amid planned support for the property market, which has made suppliers more confident that billet prices will not drop further, at least in the near future, while a slight rebound is expected now.

Following a few weeks of stability, ASEAN region-based mills have lowered billet prices to push volumes in the export market. Deals for up to 35,000 mt of Indonesian billet in total were signed at $490-493/mt FOB early this week, signaling a decline of about $7-10/mt from the previous deal price, and the offer level was voiced at not below $495/mt FOB in the middle of the week. The sales destinations for these tonnages are still unclear as two traders have taken long positions. The volumes include mostly 150 mm billet. However, after the increase in futures prices in China since Wednesday, the Indonesian mill has become more cautious. Official offers were voiced at $500/mt FOB for 3SP billet on Friday morning and then they were withdrawn as “the mill may consider an increase after seeing that futures are up again”, as one source said. Also, the latest deal for ex-Indonesian slab has been heard at $510/mt FOB, and so the exporter may target not below $500/mt FOB for billet for July shipment in these conditions. Also, rare offers for ex-Malaysia and ex-Vietnam billet have been heard at $500-505/mt FOB.

The SteelOrbis reference price for ex-China 3SP billet has inched up by $2.5/mt over the past week to $500-515/mt FOB, being too high for customers. Early this week, China’s Ministry of Finance (MOF) issued arrangements relating to the issuance of general treasury bonds and ultra-long special sovereign bonds in 2024, aiming to support the real economy. Moreover, on May 17, vice president of the People's Bank of China (PBOC) Tao Ling said the central bank will provide low-cost loans to 21 local banking institutions for the purchase of completed but unsold commercial buildings at reasonable prices, supporting the affordable housing program. These developments have had a positive impact on sentiments and futures prices for steel and iron ore have been on the rise since Wednesday.

Import offers to Southeast Asian buyers have been viewed as not being low enough, so only rare deals have been heard and most customers have been waiting for further declines. Buyers in the Philippines have been bidding at $515/mt CFR at the highest for 5SP BOF billet, versus offers at $520/mt CFR mainly. In Indonesia, the lowest offers for BOF/EAF billets have been reported at $515/mt CFR from Iran and China in particular, though market sources agree that this level may be available for most Asian open origin offers for 3SP billet. At the same time, the tradable level in Indonesia is closer to $505/mt CFR, as fixed in one deal for a distressed cargo from Iran last week, while this week at least one offer at below $510/mt CFR has been reported.

After a long pause, one of the major Algerian mills has come back to the international market with billet offers. Since the availability of material with short lead times has been limited recently, this has attracted the attention of traders, who are willing to take positions mainly for further sales to the MENA region. At least one cargo for 20,000-25,000 mt of ex-Algeria billet has been sold at $505/mt FOB for June shipment. Moreover, some market sources have said that there have been three lots on offer and the total tonnage available may be up to 80,000 mt. Offers for ex-Algeria billet started at $510/mt FOB in the middle of this week.

In Turkey, domestic billet prices have settled at $550-560/mt ex-works/CPT with only small deals concluded recently, while most of the buyers consider these levels not quite workable. In fact, Kardemir announced $550/mt and $565/mt ex-works for billet depending on the steel grade and has sold only minor tonnages. In the import segment, buying activity is quite low and the pressure on sellers has increased over the week. Rare indications from Russian and Donbass have been reported at $517-525/mt CFR while bids are at $505-515/mt CFR. Prompt shipment cargoes have been on offer at $530/mt CFR, versus $525-529/mt CFR in deals concluded earlier. Import offers from Asia have slid by $5-10/mt over the past week to $540-545/mt CFR and it seems there are not many takers. However, there may be interest in billet originating from Algeria, which has recently been sold in positions to traders at around $505/mt FOB for June shipments and has been offered to Turkey at $535/mt CFR or slightly below, sources say. Taking into account the short lead time, sources assume it is quite possible that Turkey would purchase at $530/mt CFR.

Iranian billet prices have remained stable over the past week and new deals have been closed within the same workable range. In particular, one of the mills has traded a 30,000 mt cargo at $478/mt FOB, while the previous workable price stood at $475-480/mt FOB. The material is currently available for June shipments. Most market players believe the position cargoes will be directed to the GCC where domestic demand has been stable and sufficient and the price levels are at $494-505/mt CFR UAE and $510/mt CFR Oman. In Asia, the indicative offers are at about $515/mt CFR, which is not workable, while there have been rumors about a $505/mt CFR sale of a distressed cargo. In Turkey, the offers of IF square billet have been kept at $510/mt CPT Iskenderun and $485/mt DAP Karabuk region.

Officially, ex-India billet offers have been kept stable in the range of $520-530/mt FOB, but the tradable level has been reported in the range of $495-505/mt FOB, lower than last week’s reference prices of $510-515/mt FOB. Moreover, some bids have already dropped to $490/mt FOB. According to the sources, a government mill which held an export tender for 30,000 mt with expiry on Tuesday, May 14, is heard to have received a highest bid of around $500/mt FOB or slightly below, significantly lower than expectations and no confirmation is available on whether a deal has been signed since then. Meanwhile, in the local market, billet trade prices have showed signs of cooling off after recent surges over several weeks.

*- latest deal prices