GLOBAL BILLET WRAP: Market turns ‘confusing’ amid volatility from China

The international market for steel billet has seen limited trading activity as mixed signals out of China confused traders, buyers and sellers throughout the whole of last week.

Domestic prices in China’s key Tangshan market have fluctuated during the week, which prompted Chinese traders to lower or increase their export offers to overseas customers accordingly, market participants told Metal Bulletin.

Prices ended the week at 2,970 yuan ($431) per tonne including VAT on Friday April 28, a big jump of 140 yuan ($20) per tonne from Thursday and up by 190 yuan ($28) per tonne from the previous Friday.

Looking ahead, several market participants were still unconvinced about the sustainability of this latest pricing rally in China.

“Customers are not accepting this price increase from China,” one trader in Indonesia said. “Personally, I don’t accept it either.”

Southeast Asia
Only two bookings were heard last week in Southeast Asia, the first of which was around $395 per tonne cfr in Indonesia late on April 25, for a total of 35,000 tonnes of Chinese billet in different sizes and specifications.

Most of the other offers that the buyer received, however, were above $400 per tonne cfr, as prices in China on Tuesday were moving up amid rumours about possible production cuts in Hebei province.

On April 27, a small booking of 5,000 tonnes of Q275-grade, 120mm billet was heard at $400 per tonne cfr Manila in the Philippines.

Offers to Filipino customers varied widely throughout the week, however, from as low as $400 per tonne cfr up to $425-430 per tonne cfr.

“If the traders keep changing prices that much, there will be no bookings here,” one Manila-based trader said on Friday.

CIS, Middle East-North Africa
In the CIS market, prices were also mixed because of the fluctuations in China.

Most Russian mills remained out of the market to the end of the week, with a few offer prices around $375-385 per tonne fob Black Sea, unchanged from earlier in the week.

The higher prices from China, however, did prompt some traders to offer higher numbers, at around $390 per tonne fob, for material from both Russian and Ukrainian mills.

One deal for Russian material was heard on April 26 at $388 per tonne cfr Turkey, with the cost of freight estimated around $15 per tonne.

Bids from Turkey were heard hovering around $380-385 per tonne cfr, equivalent to $365-370 per tonne Black Sea.

“Turkish mills got some lower scrap offers from Europe and they do not want to pay higher for billet,” a Turkish source said.

No bookings were heard in Egypt or the UAE.

Vlada Novokreshchenova in Dnepr contributed to this report.

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