GLOBAL BILLET WRAP: China price rises buck trend as global demand stays soft

Steel billet prices in the global markets remained steady or went up slightly during the week from Monday July 23 to Friday July 27. But demand in the major markets was still subdued, with the exception of China.

Billet prices in China were 3,790 yuan ($558) per tonne on July 27, up by 70 yuan per tonne from the previous Friday.

The inventory for the product in Tangshan was 310,000 tonnes on Friday, up by 30,000 tonnes from a week before, a billet trader in Tangshan said, quoting a local industry information provider.

No export offers out of China were heard during the week, because market participants were seeing good demand and stronger prices in China’s domestic market.

If the export price had been calculated on the basis of the domestic price, however, offers would have been around $525-530 per tonne fob, an export manager at a mill in Northern China said. The previous week, market participants were expecting offers at $515 per tonne fob.

Import prices for steel billet in Southeast Asia remained flat due to low buying interest and an uncertain market.

Japan-origin billet was heard booked at $546 per tonne cfr Philippines last week. And a cargo of Indian billet produced by the induction furnace (IF) method was sold to the Philippines at $533 per tonne cfr.

At the same time, offers of billet from the CIS region were $547-548 per tonne cfr Philippines on July 27.

“Delivery of Black Sea cargoes takes a longer voyage time, so buyers would prefer not to book from there at this price,” an East Asian trader said. “For a shorter, acceptable shipping time, the workable price in the [Filipino] market is now $545 per tonne cfr.”

Offers for billet produced from steel made in blast furnaces (BFs) and electric-arc furnaces (EAFs) were heard at $540-550 per tonne cfr over the week. These consisted of cargoes from various origins including Russia, and from traders in Asia, a trading source in the Philippines said.

Vietnamese 130mm BF billet was offered to the Philippines at $547 per tonne cfr, while IF billet of the same size from Vietnam was available at $542 per tonne cfr, sources told Metal Bulletin on Friday. The IF billet offer was $2 per tonne higher than a week earlier.

But no bookings involving Vietnamese cargoes were reported during the week.

Offers from Taiwan were heard around $553-555 per tonne cfr Southeast Asia.

In Indonesia, cargoes of various origin were offered around $545-550 per tonne cfr. But again, there were no bookings reported in the country over the week.

A few traders in the Philippines said that their customers were taking a wait-and-see approach and refraining from buying billet due to slow domestic sales for downstream finished long steel.

CIS, Turkey
The CIS billet market showed some positive movements last week despite buying activity in the major sales outlets remaining weak.

One of the reasons for improved market sentiment was the reduced availability of material in the region due to maintenance work at some mills, particularly in Ukraine, sources said.

Another factor was the large volumes of billet sales to Egypt in previous weeks, because traders were trying to replace material that previously came from Iran.

Many market participants have started to refrain from booking Iranian material since the US announced that it would re-impose trading sanctions on the country on August 6.

Moreover, customers in Egypt gradually started showing interest in CIS-origin billet last week, a source on the producers’ side said.

Some sources said that a workable price for the destination would be $517-520 per tonne cfr or $497-500 per tonne fob Black Sea, but no new bookings have been heard so far.

Turkish customers reported offers of CIS-origin billet from both mills and traders at $510-520 per tonne cfr, equivalent to $495-505 per tonne fob Black Sea. But they preferred to concentrate on scrap bookings.

Offers from CIS mills were heard at $500-505 per tonne fob Black Sea and at $510 per tonne fob Black Sea on July 26.

“I do not think any mill would agree to sell below $495 per tonne fob Black Sea now,” one producer said.

One trader expected new bookings to close within the range of $500-505 per tonne fob Black Sea.

Middle East, North Africa
Billet offers into the United Arab Emirates from Iranian suppliers were around $530-535 per tonne cfr last week, but no significant deals were heard.

Steel billet import prices increased in Egypt with higher offers heard, but demand remained limited.

Jessica Zong in Shanghai, Vlada Novokreshchenova in Dnepr, Serife Durmus in Bursa and Fiona Lam in Singapore contributed to this report.