GLOBAL BILLET WRAP: Prices down in most markets amid weak demand

Demand was low last week in most global markets for steel billet, such as Turkey, Egypt and Southeast Asia, which led to cuts in prices in most regions.

Producers from the Commonwealth of Independent States reduced their offers in the previous week, but buyers’ interest was even lower. In Southeast Asia, demand was also reduced in several countries by seasonal factors.

CIS, Turkey, Egypt
Metal Bulletin’s CIS billet export index was $510 per tonne fob on Friday July 6, compared with $519 per tonne fob a week earlier.

Overall, a lack of demand was cited as the major reason for the downtrend in the CIS export billet market.

Offer prices for the material varied mainly within the range of $515-520 per tonne fob Black Sea in the middle of last week, but such offers were also rare because mills have almost filled their order books for July.

Meanwhile, bids from customers in Turkey were heard at $515-520 per tonne cfr, or the equivalent of $500-505 per tonne fob.

On Friday, billet offers from the CIS were already being heard at $510-515 per tonne fob Black Sea.

In Turkey, market participants expected prices to fall even further.

“I think the bottom of the [CIS export billet] market will be $495-500 per tonne fob Black Sea,” one trader said on July 3. “At those numbers, [Turkish steel mills] can buy billet and sell rebar to the United States.”

Meanwhile, domestic and export billet prices in Turkey remained largely stable over the week.

With lower offers from CIS-region producers, Egyptian import prices also fell last week, amid stable domestic rebar prices.

CIS offers were reaching Egypt at $533-540 per tonne cfr, while buyers where bidding $530 per tonne cfr.

Market participants expected demand for rebar to improve in the new financial year, which started on July 1 in Egypt, due to new government projects.

Metal Bulletin’s weekly price assessment for steel billet imported into Egypt was $530-533 per tonne cfr on Thursday, falling from $535-541 per tonne cfr.

Metal Bulletin is proposing to amend the minimum tonnage used in the calculation of its CIS Billet Index.

The proposed new minimum tonnage to be included in this index is 2,500 tonnes; it is currently 5,000 tonnes. The only proposed change to this index is in relation to the minimum tonnage level.

Southeast Asia
In Southeast Asia, billet import prices widened downward to $540-550 per tonne cfr in the week ended on July 2, from $545-550 per tonne cfr previously. In the following days, prices remained stable, with further deals and offers reported within the range of $540-550 per tonne cfr.

In The Philippines, one cargo of Japan-origin billet was booked at $550 per tonne cfr late last week, while another booking for Vietnamese billet was purchased around $540-545 per tonne cfr.

Further offers to The Philippines and Indonesia were heard around $545-555 per tonne cfr during the week, with suppliers including Russia, Taiwan, India and Vietnam.

Buying interest in The Philippines was still subdued, however, with domestic rebar sales being weak. But traders expected re-rollers in the country to start to accept higher offers soon because they will need to secure shipments of the semi-finished product.

A major Indian supplier was said to have finalized a billet tender at $510-515 per tonne fob for 20,000 tonnes. As of Friday, market participants could not confirm whether the cargo’s destination was to be Sri Lanka or Thailand.

Prices for billet in China’s northern Tangshan region reached 3,620 yuan ($543) per tonne on Friday, up by 20 yuan per tonne from the previous week. But trading in the country’s rebar market was thin, due to seasonally weak demand.

Billet inventory volumes in Tangshan were flat at 240,000 tonnes on Friday, according to a billet trader which quoted a local industry information provider.

On the export side, no offers were heard last week. Based on domestic prices, market participants believed that Q235 150mm billet should be offered at $510-515 per tonne fob.

China’s Hebei province plans to cut its crude steelmaking capacity by 40 million tonnes per year over a three-year period, provincial Communist Party secretary Wang Dongfeng said at a meeting to discuss capacity cuts on July 4, according to the country’s national news agency, Xinhua.

Iran, UAE
In the United Arab Emirates, prices fell amid lower offers from Iran. Demand for rebar in the UAE was also low due to the seasonal slowdown in construction activity.

Iran offered billet to the UAE at $515-530 per tonne cfr, but no significant deals were heard.

Metal Bulletin’s price assessment of Iran export billet was $490-500 per tonne fob on July 4.

Fiona Lam in Singapore, Vlada Novokreshchenova in Dnepr, Jessica Zong in Shanghai, Cem Turken in Mugla and Serife Durmus in Bursa contributed to this report.

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