GLOBAL BILLET WRAP: Market factors drive prices further upward
Prices in the global steel billet market continued climbing in the week ended Friday March 2 as market factors supported the upward trend.
One of the major factors was the surge in domestic billet prices in China after the week-long lunar new year holiday.
Steady growth in import scrap prices in Turkey was another supportive factor for the global billet market.
Metal Bulletin’s daily index for Northern European HMS 1&2 (80:20) scrap closed on March 2 at $362.81 per tonne cfr, up by $12.04 per tonne over the week.
The daily index for similar US-origin scrap closed at $372.43 per tonne cfr, up by $11.83 per tonne compared with last Friday.
Besides that, the availability of billet was tight because most mills had closed their order books for March, and some had already started to take orders for April.
Chinese domestic billet prices were heard at 3,750 yuan ($591) per tonne on Friday, up by 150 yuan ($24) per tonne from last Friday.
Inventory for the product in Tangshan totaled 1 million tonnes on the day, down by 13,000 tonnes from a week ago, a billet trader in Tangshan said, quotingd a local industry information provider.
Billet market sentiment was positive. There were two guesses about the winter production cuts in Tangshan – either extending them beyond March 15 (the end-date previously planned) or resuming production after March 15.
If production cuts are extended, billet output will remain at a low rate, which will have a positive effect on prices. If production is resumed, the demand for billet from rerolling mills will increase, which will also have a positive effect on prices.
No price talks took place in the export market. Export offers could be around $550 per tonne fob, market sources told Metal Bulletin.
Billet offer prices heard in Southeast Asia have been increasing while supply tightens amid improvements in suppliers’ home rebar markets, particularly in India, participants said. No spot offers were heard from India during the week.
“Also, I suspect some mills are holding back from offering cargoes because the market looks very firm now,” a Philippines-based trader said.
Offers from suppliers in the CIS region and the Middle East were heard at $560-570 per tonne cfr and higher.
Numerous deals were heard done in the Philippines this week, at higher prices than the previous week’s $555 per tonne cfr.
CIS-origin cargoes changed hands at $555-565 per tonne cfr. Thailand- and Taiwan-origin cargoes were heard sold at at $560-565 per tonne cfr to the country, while Japanese billet was sold to the Philippines at $565-568 per tonne cfr.
Middle East cargoes commanded the highest deal price this week, at $575 per tonne cfr.
In contrast, billet bookings in the Indonesian market were scarce, due to low buying interest amid weak sales in Indonesia’s domestic finished goods market and the rupiah weakening against the dollar, participants said.
Buyers in Indonesia told Metal Bulletin that they received offers at $550-570 per tonne cfr from various origins, with the highest offers coming from China.
A cargo of Iranian billet was heard sold to the country on Friday at the lower end of the range. This would be equivalent to $520-525 per tonne fob Iranian Southern ports.
Iran, Middle East
Earlier in the week several cargoes of Iranian billet for April rolling were reported sold to Gulf Co-operation Council (GCC) countries and North Africa within the range of $510-520 per tonne fob.
This included one 50,000-tonne cargo sold to the United Arab Emirates and a 20,000-tonne cargo to Oman.
A customer in Oman also booked a 25,000-tonne position cargo from a trader at $525 per tonne cfr – equivalent to $505 per tonne fob. But the price was not included in the assessment because it is a secondary market deal.
Recent billet offers from Iranian mills were heard at $520-525 per tonne fob.
Iranian mills were offering steel billet at $545-550 per tonne cfr to the UAE.
A buyer believed that the offer prices were reasonable, and that stock levels in the UAE were low, so there would be more booking soon.
“There is a shortage of billet so we will have to buy at these prices,” one market participant said. “Prices are increasing every day.”
Sources reported a cargo of Iranian billet being sold to Egypt within the range of $510-515 per tonne fob.
CIS, Turkey, North Africa
The latest offers of Iranian billet were heard in Egypt at $540-550 per tonne cfr, while CIS-origin billet was on offer at $525-540 per tonne cfr last week.
“Everyone was waiting for new rebar prices to be announced, so there may be some buying [of billet feedstock] next week. But rebar demand is not strong in general,” one trader said.
The country’s biggest steel producer, Ezz Steel, kept its rebar price unchanged at E£11,970 ($677) per tonne ex-works including 14% VAT.
Beshay Steel increased its rebar price to E£12,180 per tonne ex-works, from the previous E£11,950 per tonne ex-works.
And Egyptian Steel was offering rebar at E£12,150 per tonne ex-works, up from the previous E£11,950 per tonne ex-works.
While Egyptian customers were mainly refraining from bookings, trying to assess the situation, CIS suppliers continued to enjoy good demand in Turkey, where customers continued to accept higher prices on growing import scrap values.
A 10,000-tonne cargo of Ukrainian billet was reported sold to the destination at $530 per tonne fob Mariupol, which would be equivalent to $550 per tonne cfr Turkey.
Sources said that Turkish mills paid as much as $557 per tonne cfr for billet this week.
A Turkish re-roller with assets in Algeria was reported to have booked a large quantity of CIS-origin billet within the range of $545-560 per tonne cfr.
“The market is strong now. Iron ore prices are going up. Finished and semi-finished steel products are also showing an upward tendency,” a CIS source said.
“This week, futures for raw materials and finished and semi-finished steel products are at their highest levels for the past three months. I think the market will stay firm in the near future,” he added.
Recent indications of CIS-origin billet offers were heard at $535-540 per tonne fob Black Sea.
Jessica Zong in Shanghai, Fiona Lam in Singapore, Serife Durmus in Bursa, Cem Turken in Mugla and Felipe Peroni in São Paulo contributed to this report.