Global View on Billet: Price drop in Turkey accelerates, while China holds steady

The trend is the global billet market has been uneven this week, with price declines accelerating in Turkey due to weak steel market conditions and the further fall in scrap prices. At the same time, the Asian market has been holding rather steady with a lack of sharp changes in China, where slight rises in raw material prices and stable movement or slight increases in steel prices and futures have been giving some support.

In Turkey, local integrated steel producer Kardemir has dropped its billet price to $495/mt ex-works for S235JR material and $520/mt ex-works for B420 grade and has managed to sell over 70,000 mt. One reason is that the buyers have found the price quite attractive in view of falling import scrap prices, while another reason are the slow export sales, which make buyers evaluate their billet imports carefully. The suppliers in other regions of Turkey have not yet quite settled their domestic billet prices, but the level is considered to be hardly over $520-530/mt ex-works amid the most recent market developments.

In the import segment, China’s offers have remained relatively high at $480-490/mt CFR, down by around $10/mt. According to sources, one of the mills booked a large cargo last week at $485/mt CFR, while by the end of the current week there has been talk about a $465/mt CFR sale. The latter has not been confirmed by the time of publication and the level is mostly evaluated as being unnecessarily aggressive. Malaysian prices have decreased by around $5-15/mt over the past week to $500-505/mt CFR and Indonesia is offering at around same levels, both for February shipments. In addition, there has been an offer from Ukraine at $510/mt CFR, following a sale to Egypt done last week at slightly below $515/mt CFR, sources reported.

Ex-Russia and ex-Donbass billet prices have indicated a significant price decline over the past week - by $10-15/mt to $460/mt CFR in the latest small deals, which translates to $440/mt FOB. Moreover, the most recent bids have been reported at $440-450/mt CFR for large lots. By the end of the week, there has been talk about a large sale to the Marmara region at $435/mt CFR, which is aggressive and has not been confirmed by the time of publication. However, the expectation is that the workable level for Russian origin billet may be at $430-440/mt CFR Turkish Black Sea next week. Currently, the SteelOrbis daily reference price for ex-Russia billet has settled at $430-435/mt FOB, down $20/mt over the past week.

The ex-China reference price has remained stable from late last week at $445-455/mt FOB, with the lower end of the range representing mainly the prices earlier this week, while most offers have been at $450-455/mt FOB on Friday, November 29. In the current market conditions, Chinese mills refuse to provide much below $450/mt FOB due to high costs. But there is no indication that the Chinese market will move up soon unless the Chinese government releases some good news to the market at its December meeting. Demand is weak due to the cold weather, and some Chinese traders are offering in short positions to the different markets, also expecting prices from China to move down in December. https://www.steelorbis.com/steel-prices/steel-prices-market-analyses/longs-and-billet/ex-china-billet-remains-most-competitive-in-asia-further-price-drops-difficult-1367801.htm?searchKey=China%20billet&sc=article

As for ASEAN region-based steel mills, they have been keeping their official offers at $470-475/mt FOB, but the Indonesian and Vietnamese sellers may easily agree on $465/mt FOB if there are firm bids. But traders have not been active as it is too risky to take long positions now, considering sentiments are still bearish.

The downtrend in Southeast Asia’s import billet market has continued this week even though official FOB-based prices from China have been relatively stable. A deal for Chinese 5SP 150 mm billet from a Chinese trader has been rumored at $469/mt CFR, down from offers at $475/mt CFR a week ago. Nevertheless, offers for 130 mm billet in the Philippines have been higher - at $475/mt CFR for 3SP and $482/mt CFR for 5SP - as the number of offers for this size has been very limited. At the same time, offers for 3SP 150 mm billet have been in a very wide range of $450-470/mt CFR to Indonesia and Thailand with the lowest level corresponding to some trader’s short position offers. https://www.steelorbis.com/steel-prices/steel-prices-market-analyses/longs-and-billet/import-billet-prices-fall-further-in-se-asia-as-some-traders-become-aggressive-1368192.htm?searchKey=China%20billet&sc=article

In Taiwan, the latest deal for vanadium-added billet from a Chinese trader has been heard at $470/mt CFR, down by $10/mt from the previous deal for the same specification reported last week. Big mills like Shagang, Baosteel, Benxi, etc, said they have completed their 2024 annual export targets and are resisting dropping prices to collect orders. However, traders are still aggressively shorting, according to market sources. In addition, the main billet exporters in Russia’s Far East region have had to cut prices to accelerate sales as Taiwan has lately been the main trade destination for Russia in the Far East. In particular, some sales of base grade 3SP billets have been done at $450/mt CFR Taiwan, also moving down by $10/mt over the past week. https://www.steelorbis.com/steel-prices/steel-prices-market-analyses/longs-and-billet/import-billet-prices-in-taiwan-drop-further-as-chinese-traders-aggressive-despite-expectations-1368043.htm?searchKey=China%20billet&sc=article

Iranian billet producers have restarted export sales, following a rather long break. According to sources, two 30,000 mt lots for January deliveries have been sold recently at $452/mt and $455/mt FOB, which is considered overpriced. Such a price level will not work for Asia, where the local regional workable levels have been at $450-470/mt CFR lately. In the GCC, Oman may still be a buyer at a price of around $485-490/mt CFR, while in the UAE many may fear to deal with Iranian origin for now given the anticipated regulation for tracking the origins of billet imported into the country. In addition, Iranian mills are expected to be facing even tougher conditions soon due to the impact foreseen from the natural gas usage restrictions, which are traditional during the winter season in Iran. As a result, production cuts are anticipated, but the reduced production may not result in higher prices due to the unfavorable market situation globally.

Ex-India billet offer prices are unchanged at $460-480/mt FOB and large mills have not considered any adjustments with deals perceived to be impossible, with large volume offers across Asian destinations rising and prices falling rapidly in reaction to renewed aggressive ex-China sales. While no deals have been reported over the past week, sources said that at least two eastern India-based mills have commenced spot sale negotiations for an aggregate volume of 60,000 mt, but both sellers called off talks once buyers submitted the price they considered acceptable at $440/mt FOB. The reference price for ex-India billet has settled at $450-460/mt FOB this week, down by $5/mt over the past week. https://www.steelorbis.com/steel-prices/steel-prices-market-analyses/longs-and-billet/indian-billet-exporters-out-of-market-due-to-mounting-competition-low-bids-1368013.htm?searchKey=China%20billet&sc=article