GLOBAL BILLET WRAP: Egypt shows strong billet demand, other markets weak
Buying activity in most billet markets was reduced last week amid weaker demand for finished steel due to Ramadan, the wet season in Asia and new trade restrictions in some countries.
Egypt, Turkey, CIS
Egyptian customers continued to actively build up billet inventories, as the country introduced duties against rebar imported from Ukraine, Turkey and China earlier this month.
This move is aimed to support the local long steel rolling industry, but is expected to spur billet imports in the country, sources said.
Some market participants forecast a 30% increase in rebar demand in the Egyptian market after the end of Ramadan
In Turkey, slow demand for long steel products in the export market saw Turkish mills resume billet exports.
Two cargoes of Turkey-origin billet, of about 20,000 tonnes each, were heard sold to Egypt at $405-407 per tonne fob early last week, sources said.
With the estimated cost of freight at $11-12 per tonne, this would equate to $416-419 per tonne cfr.
Meanwhile, recent bookings of CIS-origin billet from traders in Egypt were done at around $415 per tonne cfr, sources said.
Metal Bulletin’s weekly price assessment for Egyptian billet imports was $416-419 per tonne cfr on Thursday June 15, up from $410-416 per tonne cfr previously.
The Turks themselves have been predominantly stayed away from import billet bookings last week and continued to give preference to scrap purchases.
The most recent booking of CIS-origin material were heard at less than $410 per tonne cfr, but that was more than 10 days ago.
Offers from the CIS region were still heard in the country at $410-420 per tonne cfr.
The weekly price assessment for billet imports into Turkey remained unchanged week-on-week at $410-415 per tonne cfr.
Away from Turkey, CIS mills were offering their material at about $400-405 per tonne fob Black Sea.
In early June, Ukraine’s Elektrostal was reported selling several July shipment billet cargoes to a trader, totalling 30,000 tonnes, at up to $392 per tonne fob Azov Sea. To normalise it to the fob Black Sea price $5 per tonne should be added.
Algerian customers were said to have booked a 10,000-tonne cargo of Russia-origin billet at $415 per tonne cfr.
The estimated cost of freight to the destination is $20 per tonne, according to one source.
Metal Bulletin’s CIS billet index was $396 per tonne fob Black Sea on Monday June 12, unchanged week-on-week.
Late last week a 30,000-tonne cargo of Ukraine-origin billet was rumoured to have been booked by a trader at $392 per tonne fob Black Sea.
The consignment was to be eventually shipped to Egypt, sources said.
In the Philippines, Russia-origin 5sp grade billet was heard offered at $425 per tonne cfr, with rumours about a deal taking place just above $420 per tonne cfr more than 10 days ago.
Some sources doubted such a deal could be closed as there were many offers from China at $420 per tonne cfr at that time, with buying interest at about $415 per tonne cfr.
At the end of the week, the market discussed a deal taking place at $420 per tonne cfr Manila for a cargo of Q275-grade billet from China.
Most sources told Metal Bulletin they did not believe this could be true, since offer prices from this country have spiked in recent days.
On Thursday, there was information about offers of Chinese material to Manila at around $440-445 per tonne cfr, while on Friday prices were even higher.
“Today I received an offer from China at $455 [per tonne] fob,” one trading source said on Friday.
Chinese domestic billet price ended the week at 3,120 yuan ($459) per tonne on Friday, 130 yuan ($19) per tonne higher over the week despite falling demand for finished steel due to the rainy season.
Market participants in Manila expect deals to take place soon for material from origins such as Russia, Ukraine or even India, as import duties on billet from all countries have been reduced to zero in the Philippines since Saturday June17.
Meanwhile, around 40,000 tonnes of Indian billet were heard booked in other Southeast Asian countries at $400-405 per tonne fob last week.
Part of the cargo was heard sold in Bangladesh, while the other part was shipped to Indonesia at around $425 cfr, sources told Metal Bulletin.
Early last week, a 15,000-tonne cargo of Iranian billet for August shipment was heard booked in Indonesia at around $405 per tonne cfr, according to the market sources.
Later, rumours emerged about one cargo of 40,000 tonnes of Iranian billet facing payment issues.
The cargo recently arrived in Indonesia, “but the Indonesian bank refused to pay because the origin in Iran”, one local source said on Thursday.
Several other sources in Indonesia said it was true that Iranian billet cargoes had recently arrived in the country, but none of them were aware of any issues with banks so far.
Iranian producers offered billet at $370-380 per tonne fob southern ports, down $5-10 per tonne over the week on reduced demand from regional customers as a result of Ramadan.
One cargo was heard sold through traders to the UAE at $395 per tonne cfr.
Meanwhile, offers adapted to weaker demand, coming in at $400-405 per tonne cfr.
Metal Bulletin’s weekly price assessment for UAE billet imports was $395-400 per tonne cfr on Tuesday, down from last week’s $400-405 per tonne cfr.
Juan Weik in Singapore, Jessica Zong in Shanghai, Suresh Nair in Mumbai, Cem Turken in Mugla and Felipe Peroni in São Paulo contributed to this report.