Global View on Billet: Asian market shows some signs of increases, but weak scrap impact

This week, the Chinese billet market has posted some improvement in terms of prices, boosted by more stimuli from the Chinese government and expectations of further support. This triggered has some gradual upturn in the Asian region, but with scrap prices in Turkey going down and demand in the MENA region being relatively slow, sentiments have been rather negative in Asia.

The SteelOrbis reference price for ex-China billet has settled at $460-480/mt FOB, increasing by $5/mt on average since late last week, with the higher end adding $10/mt. Most offers from China have been at $470-480/mt FOB for 3SP and 5SP. The increase has been supported by expectations that more stimuli will be announced next week. The 12th Session of the Standing Committee of the 14th National People’s Congress (NPC) will be held during November 4-8, and at this event over RMB 10 trillion ($1.4 trillion) of extra debt are expected to be issued for the next few years “to revive the fragile economy”. According to market sources, RMB 6 trillion is expected to be raised over 2024-2026.

Official offer levels from the Indonesian mill were at $485/mt FOB early this week, similar to what the market saw a week earlier, being “not workable at all in all the markets,” as a Singapore-based trader said. Late last week, negotiations with a few buyers were held at a lower level, at $470/mt FOB, but an offer has returned to the previous level as allocation has been limited to February shipment. Offers from Malaysia have remained stable at $490/mt FOB.

Prices for import billet in Southeast Asia have inched up over the past week, mainly due to traders offering at slightly higher levels amid a lack of confidence that they will manage to get lower prices from mills in the short term. However, buyers have yet to accept the new levels. The lowest offers for 5SP 150 mm billet to the Philippines have been reported at $490/mt CFR Manila this week, while the tradable level for this grade and size was at $485/mt CFR last week. The latest deal for ex-Japan commercial grade 3SP billet was done at $470-475/mt CFR Taiwan late last week-early this week. One ex-Russia billet offer was at $475/mt CFR Taiwan last week. However, most offers for Chinese origin 3SP to Taiwan have been at $485/mt CFR.

Turkish buyers have been insisting on lower billet prices, seeing the decline in the scrap segment. There has been a lack of attractive billet offers lately, so only small-volume deals have been done in Turkey’s import billet market. Most Chinese billet offers have been coming to Turkey at $505-510/mt CFR, moving up from the indications at $495-500/mt CFR last week. Traders are not offering actively in short positions any more, seeing the firm trend in the Chinese market, and having some expectations for a stable trend there in the near future. At the same time, ex-Malaysia 150 mm billet, which is duty-free in Turkey, is still available at $530-535/mt CFR, stable from last week.

A sale of 3,000 mt of ex-Russia billet for November shipment was done at $490-495/mt CFR Turkish Black Sea. Also, around $490/mt CFR has been available from the mill in Donbass, the Ukrainian territory occupied at the moment by Russian troops. The freight for small volumes from the Black Sea to Turkey is assessed at $25/mt, which results in FOB levels of $465-470/mt. Market sources are still awaiting more offers from Russian mills.

In the billet market in India, the trend has remained similar. Local billet prices in India have declined by INR 900/mt ($11/mt) to INR 41,700/mt ($496/mt) ex-Mumbai and are down by INR 700/mt ($8/mt) to INR 39,400/mt ($469/mt) ex-Raipur in the central region. Activity has been very low due to the holidays. The price idea of large Indian mills is $485-490/mt FOB, but some private mills may consider $460-480/mt FOB from next week, if nothing changes, sources believe.