GLOBAL BILLET WRAP: Markets show mixed fortunes on low demand, US sanction moves

Steel billet prices in the global markets showed mixed dynamics in the week from Monday June 4 to Friday June 8, due to weak trading activity in Asia and strengthening sentiment in Turkey and the CIS region.

Iran was effectively out of the market because of the threatened reinstatement of US trading sanctions, after the Western country withdrew from the international deal on Iran’s nuclear-power ambitions.

Domestic billet prices in China were 3,700 yuan ($579) per tonne on June 8, up by 30 yuan per tonne from last Friday. Inventory for the product in Tangshan totaled 240,000 tonnes on Friday, down by 40,000 tonnes from a week before.

There were no exports heard over the week so the export price for Q235-grade 150mm billet was calculated on the domestic Chinese price at $540 per tonne fob.

Southeast Asia
Import prices for steel billet in Southeast Asia held steady over the week on soft demand and few offers received.

Billet from Central Asia was heard sold to the Philippines at around $550-555 per tonne cfr.

No other deals were reported over the week, which saw a drop in the number of offers that was partially attributed to an improvement in the domestic price in China.

Few mills were in the market, probably because most of them had sold out the material they had allocated for shipment in July.

Offers from South Korea were heard around $545-555 per tonne cfr in the Philippines late in the previous week.

Japanese offers stood at $560-565 per tonne cfr, while those from Russia were heard around $555-560 per tonne cfr.

Vietnamese suppliers were heard asking for $545-555 per tonne fob, which was equivalent to around $565-575 per tonne cfr Philippines.

As for China-origin cargoes, traders were offering these at $555-560 per tonne cfr to the Philippines, up from $545-555 per tonne cfr in the preceding week.

“It seems like offer levels are all over the place at the moment, but China’s mild price improvement may bring some stability to Southeast Asia’s import prices,” a Vietnam-based trader said.

Filipino buyers were still holding back from procuring materials during the country’s monsoon season. Bids were reported at $545-550 per tonne cfr.

Importers in Indonesia also continued to stay away from the market due to the lull in activity caused by the Islamic holy month of Ramadan, which ends in mid-June. No deals or firm bids were heard in the country.

CIS, Turkey
Sentiment in the CIS billet export market improved after the resumption in scrap and rebar trading between Turkey and the United States earlier in the week.

The thaw in trading activity followed the US decision to impose Section 232 import tariffs on steel from Canada, the EU and Mexico – all previously exempted from import restrictions. Turkey had had no exemption and the US decision leveled the market for its re-entry.

This in turn saw the CIS export billet market turn positive after almost two weeks of decreases.

Bids from customers in the Middle East and North Africa were heard mostly around $495 per tonne fob Black Sea, but CIS producers were not ready to drop their prices to less than $505 per tonne fob Black Sea.

Several market participants said that traders from North Africa were ready to pay $510 per tonne fob Black Sea.

“The market is still slow due to Ramadan, and customers need time to adjust to higher prices,” an international trader said.

Turkish billet import prices dropped over the week, while domestic prices rose slightly.

The decrease in the import prices was because of the downturn in scrap prices in the previous week, but market sentiment improved and billet import prices were expected to recover soon.

The US decision to impose its 25% tariff on steel imports to material from the EU, Canada and Mexico was expected to fuel demand for Turkish rebar and to increase materials prices.

CIS suppliers were offering billet into Turkey at around $520-530 per tonne cfr, but no fresh transactions were heard.

Meanwhile, domestic billet prices in Turkey started to recover. Metal Bulletin’s weekly price assessment for domestic billet was $520-530 per tonne ex-works on June 7, widening upward from the previous week’s range of $520-525 per tonne, assessed on May 31.

Middle East, North Africa
Iran was offering billet at $530-535 per tonne cfr to the United Arab Emirates, but buyers in the country were bidding only $515-520 per tonne cfr.

Imported steel billet prices narrowed in Egypt over the week because of limited demand.

Market participants reported no expectations of price movements in the near term because market activity remained subdued during Ramadan.

CIS-origin billet was on offer in Egypt at $525-530 per tonne cfr, but no major deals were heard.

Iran was out of the market, because the mills in the Middle Eastern country had sold all their billet until August.

But in any case, nobody wanted to buy from Iran because of the threat of US sanctions being implemented in August.

Jessica Zong in Shanghai, Vlada Novokreshchenova in Dnepr, Serife Durmus in Bursa, Felipe Peroni in São Paulo and Fiona Lam in Singapore contributed to this report.