Global View on Billet: March 2024 trend analysis

This week has brought back pessimism to the global billet market again mainly due to the weakness of the Chinese market, falling iron ore prices, and concerns over demand in the near future. Some slight improvement in terms of prices has been seen only in the local Turkish market due to the slight increase in scrap prices. For the coming week, expectations are mainly negative or relatively stable.

Prices for ex-ASEAN billet have remained at a low level and more deals have been reported since last week. The mood in the market, which was cautiously positive last week, has turned negative again due to the drop in futures prices in China, signaling that demand in the country has not improved sufficiently. Offers for ex-Indonesia billet have been reported at $495/mt FOB, down from $500/mt FOB last week. Deals for a total of 100,000 mt have been done at $490-495/mt FOB. This is in addition to the previous sale reported at a similar level. Buyers are targeting new bookings at $485/mt FOB at best.

Ex-China 3SP billet FOB prices have lost $10-15/mt over the past week to $480-485/mt. Sentiment has worsened again and it seems that demand for rebar in 2024 in China is softer than expected. Steel futures have been adjusted down significantly this week, after the rebound seen late last week, and previous inventory declines together with slow output do not help much in the low demand conditions.

The SteelOrbis reference price for import billet in Southeast Asia (both 3SP and 5SP) has settled at $500-510/mt CFR this week, losing $10/mt over the past week. Offers for 3SP 150 mm billet from traders have been reported at $500/mt CFR to the Philippines, Indonesia and Thailand. One source said that 5SP billet offers, which were at $515/mt CFR Manila last week, dropped to $508-510/mt CFR on Wednesday and fell as low as $502/mt CFR from some sellers on March 28. A few market sources confirmed that the lowest offers in the market have been from traders for open Asian origin for short positions, as FOB prices are not heard yet.

After sales of over 100,000 mt of billets to Taiwan at $500-505/mt CFR last week, down by $5/mt over the past week, a mill located in Russia’s Far East region has been asking for $508/mt CFR, hoping for better prices amid the improved mood in the scrap segment.

Prices for ex-Russia billet have not changed much this week since, even though scrap prices in Turkey have improved, last week offers from Russia were already too high for most buyers. The latest offer levels for prompt-shipment Russian cargoes have been reported at $540/mt CFR and slightly above, while the most recent deal for 3,000 mt of ex-Rostov billet was closed last week at $541/mt CFR. The offers for April shipments to the northern part of Turkey have been heard at $530-540/mt CFR. The SteelOrbis daily reference price for Russian billet has stabilized for now at $505-515/mt FOB, with the midpoint at $510/mt FOB. It is worth mentioning that large Russian billet producers mainly prefer to stay out of the market for now.

The Turkish billet market has remained limited in terms of business activity on the import side, while the price range has softened slightly. In particular, billet offers from Asia have slid, becoming more attractive for large buyers and some deals are expected to be closed shortly. The allocation from the Black Sea region remains limited since Ukraine is not so willing to deal in the current weak market, while supply from Russia and Donbass is still restricted. The latter two origins for April shipments are on offer at $530-540/mt CFR, while the upper end of the range is also valid for ex-Russia cargoes for prompt shipment. A 3,000 mt billet sale from Rostov was closed last week at $541/mt CFR Karabuk. As for Asia, China has returned to the Turkish market with offers at $525-528/mt CFR and $515-520/mt CFR levels are believed to be achievable. Indonesian material is on offer at $530-540/mt CFR, down $10/mt over the past week. There has been a rumour of a 40,000 mt sale at $520/mt CFR, but the information has not been confirmed fully. In the local market in Turkey, Kardemir announced a $10/mt increase in its billet offers to $555-565/mt ex-works and, according to sources, managed to trade around 20,000-25,000 mt of billet.

Ex-India billet offer prices have been kept stable for now, but trade has fallen silent amid a fresh negative wave across Asia and buyers are expecting further declines. Ex-India billet offers have remained unchanged for now at $490-502/mt FOB from suppliers, but most Asian buyers prefer to source from closer sources like China and the ASEAN region at almost similar offer levels, but at lower freight costs. Unconfirmed reports indicated that a government mill, which was scheduled to close an export tender for 30,000 mt of prime concast billet, had received the highest bid at $485/mt FOB and, though the bid was not yet accepted and though there was no indication whether the tender would be extended, sources said that the lower-than-expected bid spread a negative mood among exporters with some mills in fact pulling back from exports.