GLOBAL BILLET WRAP: Demand remains muted in most markets

Steel billet prices in most global markets were largely unchanged or edged downward during the week from Monday July 30 to Friday August 3, due to limited buying interest and uncertainty about the impending United States sanctions on Iran.

China was the exception, with higher billet prices in the country driven by enforced production cuts.

Import prices in Southeast Asia were largely unchanged during the week, with soft seasonal demand and tight supply keeping offer and transaction levels steady.

Slow buying of rebar in the region’s domestic markets resulted in weak buying interest for billet, while the rainy season in the Philippines has damped demand since early June.

Filipino buyers did, however, purchase large volumes of billet from the Commonwealth of Independent States (CIS) at around $545-550 per tonne cfr.

Most market participants estimated that the workable price range in the market remained at $545 per tonne cfr Manila.

“The acceptable price will probably move up a little to $550 per tonne cfr soon,” a trader based in the Philippines said on Friday.

There were also more offers and bookings reported for cheaper billet made in induction furnaces (IF) during the week, amid reduced supply of billet produced in blast furnaces or electric-arc furnaces.

Transactions involving IF billet from India and Vietnam were concluded to Southeast Asia at $530-536 per tonne cfr throughout the week.

China’s domestic billet prices were 3,850 yuan ($562) per tonne on Friday, up by 60 yuan per tonne from a week earlier due to tight supply, caused by steel production cuts in the country, enforced to satisfy environmental protection regulations.

The inventory for the semi-finished product in Tangshan was 330,000 tonnes on Friday, up by 20,000 tonnes from the previous week, a billet trader in Tangshan said, quoting a local industry information provider.

Based on domestic prices, Chinese export offers for billet would be around $530-535 per tonne fob, an export trader in eastern China said. No export deals were heard during the week.

The CIS billet export market was rather quiet during the week to Friday.

Although buying activity was sluggish in the majority of import destinations, CIS mills were nonetheless targeting prices of at least $500 per tonne fob Black Sea, citing reduced availability of the product in the market.

Turkish customers refrained from booking CIS billet because Turkey’s currency was losing value while local demand for finished long steel was shrinking.

Interest in billet imports was also low in Egypt due to the slow rebar sales within the country, as well as sufficient billet stocks purchased in previous weeks.

That being said, an Egyptian buyer was rumored to have purchased a Russian cargo at $500 per tonne fob Black Sea.

Given the weak demand in the Middle East-North Africa region, CIS producers turned to Southeast Asia instead, where trading was more active.

Offers from the Black Sea basin to Southeast Asia were around $500-505 per tonne fob.

Middle East, North Africa
No improvement in the Middle Eastern steel markets is expected until the end of August, after the Hajj and Eid al Adha religious celebrations.

In Iran, export prices for the semi-finished product softened during the week ended Wednesday, because buying activity in the major outlets was limited by the imminent renewal of US trading sanctions. The sanctions are expected to come into force on August 6.

At the same time, however, there was less billet available for export due to the Iranian government’s request that more steel products be allocated to domestic customers, where demand has increased significantly.

Offers of Iranian billet in the United Arab Emirates were heard at $510-515 per tonne cfr, equivalent to $490-495 per tonne fob.

But buyers in the UAE were not interested in Iranian billet due to the threat of US sanctions.

Prices for domestic and imported rebar in the UAE fell amid weak seasonal demand during the week to Tuesday, although billet import prices were relatively steady.

Oman offered billet to the UAE at $530-535 per tonne cfr, while suppliers in the CIS region were asking for $540-545 per tonne cfr.

“UAE re-rollers have already secured billets until October,” a source said. “There is no hurry to book.”

Egypt’s billet import prices decreased slightly with lower offers in the market during the week to Thursday, while its domestic rebar prices were unchanged on slow demand.

CIS-origin billet was offered in Egypt at $520-525 per tonne cfr, but no major deals were reported.

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