Global View on Billet: Prices fluctuate in limited range, mood among buyers still quite depressed

There have been only limited changes in billet prices in most major international markets over the past week. However, in general, depressed sentiments still prevail among the main buyers in the MENA region, due to falling scrap prices, and in Asia where the outlook for the Chinese market has remained rather negative.

The SteelOrbis reference price for ex-China billet has been at $460-470/mt FOB this week, a small increase compared to $460-465/mt FOB late last week. Chinese billet prices are still more competitive compared to ex-ASEAN prices, and shipment conditions are better as Chinese mills may still offer for December shipment, but, overall, firm offers are still limited. Chinese mills have been focusing on their local market lately, and, since some steel production cuts have been announced in Hebei late this week, there are some expectations that rebar and billet prices in China may remain stable or move down gradually in the coming week.

The official offer of ex-Indonesia billet has been at $485/mt FOB for February shipment this week, while the latest deal was done at $475/mt FOB late last week. No new deals have been reported this week and, since the mill has some slab allocation for December shipment and wire rod for January shipment, it will focus on these products rather than on billet. Offers from Malaysia have been at $480-490/mt FOB, so last week’s target of $500/mt FOB has gone, but mills have been resisting providing big discounts on the current level.

Though a few deals have been done in Southeast Asia’s import billet market at the previous price levels, most market sources are waiting for a further price decline. A deal for 10,000 mt of open origin 5SP 130 mm billet was done to the Philippines at $490/mt CFR late last week. This price translates to $485/mt CFR at the highest for 150 mm billet. There have not been many offers for 130 mm billet lately, and, since it is the most popular billet in the Philippines, prices are higher for this size. On Friday, at least one offer for 150 mm 3SP has been heard to Manila at $480/mt CFR. Another deal for 3SP has been heard to Thailand at $485-490/mt CFR, with payment deferred for 60 days. The lowest offer for Chinese 3SP billet has been reported to Taiwan at $475/mt CFR this week.

On October 24, Turkey's integrated steel producer Kardemir announced its 150 mm billet sales at $535/mt ex-works for S235JR, down from $550/mt ex-works announced two weeks ago. This translates to $527.15-529.65/mt ex-works, considering discounts for different volumes and cash payments. By the time of publication, no information on deals for Kardemir’s billet has circulated in the market. In other regions of Turkey, billet prices are at $560-580/mt ex-works. In particular, the upper end of the range is valid for the Iskenderun region, where local suppliers' indications have been reported at even up to $600/mt ex-works.

In Turkey’s import market, there was a rumor about a cheap sale of Chinese billet, which has been disproved by SteelOrbis, and Chinese indications are evaluated at $495-500/mt CFR, while buyers’ price ideas are at least $10/mt lower than that. Indonesia and Malaysia are offering at $520-530/mt CFR depending on the supplier, billet size and shipment. Major Turkish buyers are focused on imported scrap at the moment and demand for large billet cargoes of 50,000 mt is limited.

The SteelOrbis reference price for ex-Russia billet has settled at $475-480/mt FOB, decreasing slightly by $2.5/mt on average from late last week. Most offers from Russia have been heard at $505/mt CFR and above, translating to $480-485/mt FOB Black Sea. The price for billet from Donbass has been at $500/mt CFR. But most buyers have been insisting on $495/mt CFR or below.