GLOBAL BILLET WRAP: Bearish demand continues to restrain spot prices
The downtrend in global billet prices continued over the past week as buyers looked out for bargains amid poor demand for downstream long steel products.
However, production cuts in China may boost prices in Asia in the coming weeks as supplies are expected to be tighter.
The domestic billet price in China was 3,830 yuan ($577.49) as of 3pm local time on Friday November 17, 110 yuan per tonne higher from last Friday.
The inventory of billet was around 360,000 tonnes in Tangshan. Market participants do not expect any sharp drops in prices in the near term as they expect supply to be tighter. This is due to the winter production cuts which started from Wednesday November 15.
There were no export transactions reported this week.
“Offers at $550 per tonne fob China for spot billet export cargoes were not accepted by any overseas buyers,” an east China exporter said.
Mill cargoes from the Middle East and Russia were being offered in the spot market at $485-490 per tonne into Southeast Asia. End-users were looking for cargoes at $470-475 per tonne cfr Southeast Asia, but sources told Metal Bulletin that this was not workable for non-Iranian volumes.
Traders said deals for Iran-origin material had been concluded at $470-475 per tonne cfr Southeast Asia. However, this was not used for price assessment as it does not fulfill Metal Bulletin’s assessment criteria.
Sources said the workable price level was $480-490 per tonne cfr Southeast Asia.
Fundamental demand from downstream re-rollers remained weak in view of the falling rebar prices in Asia, with most buyers looking out for good bargains for import cargoes.
“Some end users are even trying to indicate $460 per tonne cfr Southeast Asia buying levels, but that is surely too low for any seller,” a trader based in Southeast Asia said.
CIS, Turkey, Egypt
Early in the week, CIS billet offers were at $455-465 per tonne fob Black Sea. However, customers were reluctant to conclude deals, and were submitting bids at $440-450 fob.
There were rumors of a CIS-origin cargo being sold at $440 fob Black Sea to Turkey. However, this could not be confirmed. There was also talk of an offer at $455 fob Black Sea to Algeria.
Turkish scrap prices increased towards the end of the week, causing offers for CIS-origin cargoes to increase to at least $465 per tonne fob Black Sea. However, there were no new deals heard done.
Turkish domestic and imported billet prices fell this week, while export prices remained comparatively stable, sources said on Thursday November 16.
Metal Bulletin’s weekly price assessment for billet imports into Turkey was $465-470 per tonne cfr, down from $475-485 per tonne last week.
Billet suppliers in the CIS region lowered their offers to $465-480 per tonne cfr levels to combat weak Turkish demand.
“Turkish mills prefer to buy scrap over billet due weak demand in the finished steel export markets. The mills are importing billet within the inward processing regime, [under which] they must export same amount of [finished steel] to avoid the [import] tax,” said a Turkish source.
“The export rebar market is very slow and mills prefer to buy scrap,” he added.
Domestic billet prices followed a similar trend to imports, with Metal Bulletin’s weekly price assessment for domestic billet at $480-485 per tonne ex-works, down from $485-490 per tonne ex-works.
The weekly price assessment for billet exports out of Turkey was unchanged at $490-495 per tonne fob.
Steel billet import prices into Egypt fell this week as deal and offer prices dropped, while local rebar prices remained largely unchanged.
Iran sold a total of 35,000 tonnes of steel billet to Egypt at $460-475 per tonne cfr. CIS billet was offered to Egypt at $480-485 per tonne cfr, and a trader said that $475 per tonne cfr was a workable price.
Metal Bulletin’s weekly price assessment for Egypt billet imports was $460-480 per tonne cfr on Thursday November 16, down from $480-495 per tonne cfr.
A trader said that market participants in Egypt preferred to wait and see what would happen as scrap prices increase.
The billet import markets in the United Arab Emirates and Saudi Arabia have remained weak over the past seven days, with market participants in the UAE expecting local rebar prices to fall.
Iran offered billet at $480-490 per tonne cfr to the UAE, but no deals were heard.
Metal Bulletin’s weekly price assessment for UAE billet imports was unchanged on November 14 at $480-490 per tonne cfr.