Global View on Billet: Market more active in terms of sales, price changes limited except for China

Trading in the global billet market has been relatively high as most major suppliers like ASEAN, China, Iran and Russia have managed to push some volumes. In general, the price fluctuation has been limited and the biggest change has been seen in China, where export prices dropped by $10/mt after futures fall early this week.

Turkey has been showing a high interest in import billet purchases for the second week in a row since the buyers have decided to restock, seeing the higher import scrap prices and lack of billet availability. In addition, there have been several prompt shipments cargoes in the market and some mills decided to grab them. As a result, since end-May, Turkish mills and re-rollers have booked well over 200,000 mt of billet of different origins, but mainly non-Russian ones, and the prices have mainly remained stable. Particularly, a 50,000-55,000 mt ex-Malaysia cargo has been sold at $530-532/mt CFR Izmir for June shipment, another one from Asia for 20,000 mt – to Iskenderun at around $530/mt CFR. A total of 35,000-37,000 mt of Algerian billet were sold at $530/mt CFR Marmara and $534/mt CFR Izmir. By the end of the week, another ex-Algeria lot has been rumored as sold for 25,000-30,000 mt at slightly below $530/mt CFR. In addition, there has been talk about a sizeable sale of billet from Bahrain to Turkey at around $525-530/mt CFR. However, since the information has not been confirmed, many believe it is hardly possible as with the freight of at least $40/mt from Gulf the FOB price would be close to $480-485/mt FOB. In fact, such a level is workable for Iranian origin but is hardly reachable for the GCC.

Despite a majority of Turkish billet import purchases were from Asia and the Middle East, Russian suppliers have also managed to sell, though in more modest volumes. A total of 16,000 mt have been sold this week at $525-526/mt CFR for prompt shipments, while around 10,000-20,000 mt of ex-Russia billet have been traded at $518/mt CFR Marmara. Previously, the deals for ex-Donbass and ex-Belarus material were closed at $515-520/mt CFR, mainly for July shipments. The SteelOrbis daily reference price for ex-Russia Black Sea-based billet is at $498-500/mt FOB, $6.5/mt up since early this week.

Chinese traders have started to offer ex-China origin billet in the market more active this week as its prices on FOB basis have been more competitive compared to ASEAN, where mills have been standing on the previous levels. As a result, at least one deal for ex-China billet has been reported to the Asian region. According to market sources, 30,000 mt of ex-China 5SP 150 mm modified billet have been sold to the Philippines at $505-507/mt CFR, down from up to $520/mt CFR in the previous deals for ex-ASEAN material to the country. Ex-China reference billet FOB price has lost $10/mt to $480-490/mt. The slow demand season has started in China, plus macroeconomics have influenced steel prices and it seems steel inventory pressure is up again from June. However, since the middle of the week, futures and iron ore prices have posted some gradual rebound and more rumors have emerged about steel production cuts in Chinese major provinces, like Shandong in particular.

Ex-ASEAN billet prices have failed to decline much. The latest deal for a sizable lot has been done by the Indonesian mill at $495/mt FOB late this week, similar to the previous bookings, even though the mood has worsened since then. The deal has been reported done to Latin America, which explains such a high level. Latin American customers have been looking for 80,000 mt of billet in total this week and over the past months these inquiries have been covered by ASEAN mills, considering limited options for buyers and good price for the sellers, compared to other markets. Asian buyers will target not above $490/mt FOB from ASEAN in next bookings. Also, the Malaysian mill is reported to have sold around 40,000 mt of billet at “below $500/mt FOB”, but this could not be confirmed by the time of publication. Most traders polled by SteelOrbis assess the tradable level for Malaysian billet at $490-495/mt FOB now.

The SteelOrbis reference price for imported billet (3SP and 5SP) in Southeast Asia has been settled at $501-512/mt CFR, with the midpoint at $506.5/mt CFR, down by $6/mt on average over the past week. Last week ex-Russia billet sale was done at $515/mt CFR, but this week offers for ex-ASEAN and ex-China offers slipped to $510-515/mt CFR in the first half of the week and a deal done to $505-507/mt CFR on Thursday to the major mill in the Philippines. Offers for ex-China 3SP billet have been reported at $501-506/mt CFR to Indonesia and Thailand, while last week the lower level for this origin was at $505/mt CFR.

Iranian mills have managed to activate their billet exports after quite a long period of silence. The reported prices of the new sales, closed by two mills are at $480-482/mt FOB, while another deal has been closed at $475/mt FOB. All cargoes are for end-July and August shipments and the total tonnage is around 70,000-80,000 mt. Most market players have doubts that these positions will be sold to Asia, taking into account the latest workable level at $505/mt CFR Indonesia and the freight rate of around $35-40/mt. In the GCC, the prices are at $510-515/mt CFR to Oman and the UAE, which with around $20/mt might be workable and profitable for the sellers. However, the buyers in this area are also insisting on discounts. The IF billet from Iran is mainly on offer at $430-440/mt FOB with down to $420/mt FOB levels considered possible.

The ex-India reference billet price has settled at $490-500/mt FOB mainly after bids fell below the $500/mt FOB mark. But offers from India have also been corrected down, to $500-510/mt FOB, and at least one trade has even been rumored at $490/mt FOB, compared to $520-530/mt FOB a week ago. Sources said that a government mill held an export tender for 30,000 mt with the final date of June 10 and that the highest received bid was at $480-485/mt FOB, but no official confirmation has been available on whether a sales contract was signed thereafter as most market sources believe the level in question is too low for the seller. On Thursday, Indian government-run steel producer Rashtriya Ispat Nigam Limited (RINL) announced another export tender for 30,000 mt of prime concast steel billet for shipment by August 8.

*- latest deal price