GLOBAL BILLET WRAP: Price trends mixed as market movements diverge

Price trends in the global steel billet market were mixed in the week ended Friday February 2 with pricing moving in different directions in the various markets.

In Southeast Asia, the market was bullish because of reduced availability of the material, with Chinese suppliers out of the export market and offers of India-origin billet being scarce due to the strength of the country’s domestic long steel market.

Meanwhile, in other global markets – the Middle East-North Africa, Turkey, the CIS and Latin America – a downtrend prevailed amid falling raw material prices as well as cautious buying.

In particular, Metal Bulletin’s daily index for US-origin import HMS 1&2 (80:20) was $345.30 per tonne cfr Turkey on February 2, against $357.68 per tonne a week earlier.

Middle East-North Africa, CIS

Offer prices for Iran-origin billet slipped to $490-500 per tonne fob last week while customers bid $480-490 per tonne fob.

An Iranian producer offering at the higher end of the range said that the $500 per tonne fob price was high for the current market situation, but also said that there was tight material availability at the mill.

A cargo of Iranian billet was reported sold to Oman at $505-508 per tonne cfr, equivalent to $489-491 per tonne fob Iranian ports. This information could not be widely confirmed at the time of publication, however.

In the UAE, Iranian mills were offering steel billet at $520-525 per tonne cfr for late-March delivery, but no major bookings have been heard since several billet cargoes from Iran were booked earlier in January.

Billet from fellow member-nations of the Gulf Co-operation Council (GCC) was offered to the UAE at $530-535 per tonne cfr.

The latest confirmed sales of Iranian billet were heard done within the range of $496-505 per tonne fob in late January, to customers in the GCC, Jordan, Egypt and Southeast Asia.

Sources on the Egyptian side confirmed that about 20,000 tonnes of Iranian billet was booked at $520 per tonne cfr.

And CIS-origin rebar was on offer in Egypt at $505-515 per tonne cfr last week, $15 per tonne lower than in the previous week.

No new bookings were heard, however.

“People will wait to see [how far this price drop goes. There are] already some quantities in port but clearing the material is slow,” one market participant said.

In Turkey, CIS billet suppliers were offering the material at $520-525 per tonne cfr, but a few sales were heard at $505-513 per tonne cfr.

CIS-origin billet was available at $500-505 per tonne fob Black Sea last week. But on Thursday, an offer of $490 per tonne fob Black Sea was heard from one Ukrainian mill.

The producer was said to be in negotiations with Algerian customers, but it was not clear whether the deal had been finalized by the time of writing.

The demand in the Middle East-North Africa region was modest, and the producer was said to be offering its billet to Southeast Asia, where customers faced reduced availability of material, at $530 per tonne cfr.

Southeast Asia
In Southeast Asia, offer prices for imported billet were increasing because of the tightening supply. Chinese mills were staying out of the export market, while India-origin billet was also scarce due to high domestic rebar prices in the country, a Singapore-based trader said.

No deals or firm offers involving China-origin billet were heard over the week. “Chinese offers seem to have disappeared,” a trader in the Philippines said.

Offers from Taiwan were heard at $540-545 per tonne cfr late in the week. Japanese cargoes were offered to Indonesian buyers within the $535-540 per tonne cfr range, according to a local trader.

Earlier in the week, CIS-origin cargoes were offered at $545 per tonne cfr, narrowing upward from $535-545 per tonne cfr a week earlier. India- and Middle East-origin cargoes were offered at around $540 per tonne cfr.

Small volumes of Japanese billet were offered at $536 per tonne cfr, while offers of material from mills in other Asian countries such as Vietnam were $540-545 per tonne cfr.

Buyers in Southeast Asia indicated their interest at $535-540 per tonne cfr.

Deals involving cargoes from the CIS were heard concluded at $543 per tonne cfr, while Middle Eastern billet was sold at $538 per tonne cfr.

A major trading company sold an India-origin position cargo at $520 per tonne cfr to Thailand, sources said.

China
Domestic billet prices were 3,620 yuan ($575) per tonne at 3pm on February 2, up by 20 yuan per tonne from last Friday.

The inventory of product in Tangshan has risen to 720,000 tonnes, up by 120,000 tonnes from a week ago, a billet trader in Tangshan said, quoting a local industry information provider.

Stockists and re-rolling mills were building inventories to cope with the expected temporary rise in demand created by China’s lunar new year holiday, market sources said.

Re-rolling mills will resume production around March 15. Market participants expect to see higher billet prices when these mills restart production.

No billet offers were heard last week from foreign outlets. Taking domestic prices into account, export offers could be around $530 per tonne fob, a Chinese exporter said.

Jessica Zong in Shanghai, Fiona Lam in Singapore, Serife Durmus in Bursa, Cem Turken in Mugla and Felipe Peroni in São Paulo contributed to this report.