GLOBAL BILLET WRAP: Price downtrend persists amid pressure from China, scrap

Prices in the global billet market continued to trend downward in the week ended Friday April 6, spurred by a continuing decline in Chinese export billet prices as well as a recent sharp drop in import scrap prices in Turkey.

Metal Bulletin’s daily index for Northern European HMS 1&2 (80:20) closed on Friday at $348.78 per tonne cfr, down by $18.27 per tonne week-on week, while the daily index for similar US-origin material closed at $358.25 per tonne cfr, down by $18.48 per tonne week-on-week.

In these market conditions, buying activity in the billet segment was reduced, with customers expecting to see more price reductions in the future.

China, Southeast Asia
Export offer prices for China-origin steel billet dropped by $15-25 per tonne week-on-week to $515 per tonne fob, Metal Bulletin was told.

This was equivalent to about $530-535 per tonne cfr Philippines and $525-530 per tonne cfr Indonesia.

A small shipment of billet from induction-furnace mills was also offered at $535 per tonne cfr Manila late last week.

“It seems like China is restarting its billet exports again,” an Indonesia-based buyer said.

Participants in China and Taiwan exited the market on Thursday and Friday for the Qingming festival public holiday.

This meant that fewer offers were heard this week because some suppliers from other regions were waiting for China to return to the market next week, so that they can refer to Chinese prices before releasing their offers, according to traders in Southeast Asia.

But an East Asian trader sold Middle East-origin cargoes to Indonesia at $545 per tonne cfr, sources told Metal Bulletin.

In contrast to export prices, domestic billet prices in China picked up week-on-week amid improved demand for semi-finished and finished long steel products in the country.

Domestic billet prices in the country’s Tangshan region reached 3,410 yuan ($542) per tonne ex-works on April 6, up by 70 yuan per tonne from the week before.

CIS, Middle East-North Africa
Some CIS producers followed the downward trend in an attempt to win contracts, and had decreased their offers to $515 per tonne fob Black Sea by the end of the week.

On April 2, CIS billet offers were mainly heard within the range of $520-525 per tonne fob Black Sea.

Sources in Turkey and in Egypt reported that CIS-origin billet was available at $540-545 per tonne cfr in the first half of the week. The cost of freight to Turkey is around $15 per tonne, and to Egypt $18-20 per tonne.

Later in the week, several cargoes of Ukraine-origin billet, allegedly totaling 30,000 tonnes, were reported sold to Turkey and Egypt through traders within the range of $525-530 per tonne cfr.

This week, traders offered Iranian billet to customers in Egypt at $525 per tonne cfr, equivalent to $500 per tonne fob. But no bookings were heard done because market participants expected prices for CIS material to reach a similar level.

Bookings from Russia were heard concluded in late March at $510 per tonne fob Black Sea by traders.

Nevertheless, Ukraine’s major long steel producer, ArcelorMittal Kryvyi Rih, kept its billet offers at $545-550 per tonne fob Black Sea, the range within which the company’s most recent bookings were done several weeks ago.

“As a major long steel producer, ArcelorMittal Kryvyi Rih does not see the grounds for a decrease in global steel prices and has no intention of decreasing its offer prices,” a company source told Metal Bulletin. “In the future, prices may increase amid reduced availability of billet.”

Compatriot mill Elektrostal offered similar material at $535 per tonne fob Azov Sea, including pre-payment. This was equivalent to $545 per tonne fob Black Sea, without pre-payment.

No new bookings from the two producers were heard done over the past week.

In the United Arab Emirates, import billet prices remained unchanged over the week, mainly due to a lack of activity.

Iranian mills returned to the market after the Persian new year with lower offers. Prices fell to $515-520 per tonne fob, against $530-535 per tonne fob in mid-March.

No new bookings were reported done at the time of publication.

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.

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