GLOBAL BILLET WRAP: China, Turkey keep fuelling steel billet price rises

The continuing upward trends in the markets for Chinese domestic billet and Turkish imported scrap have continued to fuel the rise in international steel billet prices last week, Metal Bulletin has heard.

Billet prices in China’s Tangshan province started the week soaring by 100 yuan ($14.55) per tonne within 24 hours to 3,330 yuan ($484) per tonne including VAT on Tuesday, a four-year high.

One source attributed the rise to a surge in demand spurred by higher prices for major downstream products manufactured from billet, such as steel strip and sections.

On Wednesday, however, the billet price fell by 90 yuan ($13.09) per tonne before regaining 40 yuan ($5.82) per tonne by the end of the week to stand on Friday at 3,280 yuan ($477) per tonne including VAT.

As the domestic billet price skyrocketed, most traders withdrew their export offers in the face of intense competition from other countries.

With Chinese suppliers being largely absent from this market, steelmakers from Asia, the CIS and the Middle East have taken advantage of rising prices.

At least 60,000 tonnes of billet were heard sold last week from India at prices between $390 and $410 per tonne fob.

Sources said that 20,000 tonnes were destined for Indonesia, at a final price around $425 per tonne cfr. Another 20,000 tonnes were heard sold in Bangladesh.

The remaining 20,000 tonnes sold at $410 per tonne fob would be destined for Thailand, even though it was not immediately clear whether any customer had accepted the price – which was estimated to be at least $425-430 per tonne cfr.

“I heard that one trading company was offering [India-origin billet in Thailand], but I don’t know if this was sold,” one source said.

Thai traders said that offers for Iranian billet had recently increased to $420 per tonne cfr, which means that any customer looking to buy non-Iranian material would have “no choice” other than to accept prices of $425-430 per tonne cfr.

In the Philippines, Thai billet was heard changing hands at prices close to $455 per tonne cfr, while CIS billet would have been accepted at prices of more than $440 per tonne cfr.

Indian billet was offered in the Philippines at $440-445 per tonne cfr, with rumours that one cargo might have been sold.

The latest offers from Turkey to Southeast Asia were heard within the range of $455-460 per tonne cfr, but with no deals heard concluded at these prices yet.

Meanwhile, a 20,000-tonne position cargo from Turkey was reported booked in Indonesia at $430 per tonne cfr.

Offers from China were heard ranging between $460 and $470 per tonne cfr early in the week in Southeast Asia.

Cargoes from outside the Assn of Southeast Asian Nations (Asean) region, such as Russia and Turkey, carry a 3% import duty in the Philippines. Imports from China are exempt from this tax since the country has a trade deal with Asean, while a trade agreement between India and the region means that India-origin billet carries a 1% duty.

CIS, Turkey
In Turkey, billet prices have continued to increase in line with strengthening scrap prices.

CIS-origin material was offered at $415-430 per tonne cfr but those prices were not workable for Turkish buyers, sources said.

Customers in Egypt, which is the second-largest buyer of CIS billet, also refrained from bookings due to the fall in the country’s domestic finished steel prices as well as lower demand.

Metal Bulletin’s weekly price assessment for billet imports into Egypt was $400-405 per tonne cfr on Thursday February 23, unchanged week-on-week.

“The difficulty in the market is that, today, we cannot find any buyer who can pay us $400-410 per tonne cfr – not in Turkey, not in Italy. Egypt still has payment problems, so we do not ship much there,” one trader said.

Despite lower interest from these destinations, CIS billet prices are likely to remain firm, sources said, referring to lower allocations of the material from Ukraine.

Some Ukrainian mills have recently faced raw materials shortages due to unofficial railway blockades in the east of the country, which made them either reduce steel production or stop it completely.

In particular, Ukraine’s Industrial Union of Donbass (ISD) failed to supply 54,700 tonnes of billet recently.

The latest billet offers from Ukraine and Russia were heard at $400-410 per tonne fob Black Sea to various destinations.

A 14,000-tonne consignment of high-manganese Ukraine-origin billet was reported traded to North Africa at $392 per tonne fob Azov Sea early last week – probably to Algeria, sources said.

High-manganese material is traditionally $5-7 per tonne more expensive than standard material.

Another 10,000 tonnes of Russian billet were also heard booked in North Africa at $400 per tonne fob Black Sea.

Juan Weik in Singapore and Suresh Nair in Mumbai contributed to this article.