GLOBAL BILLET WRAP: Prices fall amid mixed market signs

Steel billet prices fell in most markets this week, as demand remained limited and sellers from China and other regions were forced to reduce their offers.

A drop in rebar prices in the Chinese spot and future markets late last week affected steel billet offers from the country and made buyers increasingly cautious.

Meanwhile, expectations in some markets were affected by surging coal prices, after several coal producers in Australia declared force majeure on shipments due to the effects of Cyclone Debbie.

Metal Bulletin’s index of premium hard coking coal increased by $108.10 per tonne this week, to $260.01 per tonne fob Australia.

The Chinese billet market returned from the public holidays of Tomb-Sweeping Festival with a slight recovery, with prices of Tangshan material surging by 40 yuan ($5.80) on Wednesday April 5, to 3,140 yuan ($455).

Expectations in the long steel market were boosted by news of a new economic zone in the country, which gave momentum to billet prices.

But the gains were short-lived and, in the last two days of the week, billet and rebar prices plunged again.

“East China is forecast to experience a rainy April, which might result in low trading activity during the whole month,” a Shanghai-based trader said.

Traders in the country’s northern region cut rebar prices consecutive times on Friday, but still failed to increase sales volumes.

Domestic rebar prices in northern China also decreased by 180-190 yuan ($26-28) per tonne from a week earlier, to 3,400-3,430 yuan ($493-497) per tonne.
Chinese traders are more concerned about weak demand from Southeast Asia, one of the major markets for the country’s exports.

Southeast Asia
In Southeast Asia, billet prices fell for the third consecutive week, reaching levels close to those seen in mid-February.

The drop in Chinese prices later in the week made Southeast Asian buyers even more nervous, as they are waiting to see when the market will reach a bottom.

In Indonesia, cargoes from Russian and Turkish producers were offered at $435-440 per tonne cfr early in the week, but buyers were not willing to accept these price levels.

At least one deal from India-origin material was heard last week below $420 per tonne cfr in the country.

In Thailand, a deal for a small volume was closed for Iranian material at around $400 per tonne cfr, but the price was not a reference to the market, according to a source.

In both Indonesia and Thailand, buying interest remained below $420 per tonne.

In the Philippines, offers from Chinese traders were at $450 per tonne cfr before the public holidays, but on Thursday, billet offers fell to $440-445 cfr.

Chinese traders were willing to accept bids of as low as $435 per tonne cfr, but there was no interest from buyers.

CIS, Mena
In the CIS region, buyers’ attempts to reduce prices were met with reduced supply from local billet producers.

Buyers in Egypt were bidding at $390 per tonne cfr for CIS material, as the country was affected by currency scarcity and low domestic long steel prices.

But CIS-based mills wanted to sell at $395-405 per tonne fob Black Sea, as a rebound in ferrous scrap prices in Turkey was already being anticipated by producers.

Also, steelmakers are sold out of April production, and are yet to launch offers for May-rolling material.

In this context, offers of CIS-origin billet came mainly from traders, which were heard offering material at $405-420 per tonne cfr in Egypt, the equivalent to $385-390 per tonne fob Black Sea.

Metal Bulletin’s weekly price assessment for CIS billet exports widened downward to $370-395 per tonne fob Black Sea on Monday April 3, from $385-395 per tonne fob previously.

In Egypt, market participants were increasingly concerned about the rise in Australian coal prices.

“I think billet prices will increase soon as coke prices are increasing, and demand may improve then as stocks will be reduced,” a trader told Metal Bulletin.

Metal Bulletin’s price assessment for Egyptian billet imports was $390-410 per tonne cfr on Thursday 6, up from $390-405 per tonne cfr a week earlier.

Offers for Iranian billet into the UAE were heard as low as $395-405 per tonne cfr, but no deals were closed amid reduced market activity.

In Turkey, the drop in scrap prices from late March remained the main driver for the billet market this week, which saw a slight reduction in billet import prices.

Turkish buyers were willing to pay around $395-400 per tonne cfr, while offers from CIS producers were at $405-415 per tonne cfr.

Metal Bulletin’s weekly assessment of Turkish import billet prices narrowed downward to $400-405 on April 6, from $400-410 a week earlier.

On the export side, prices remained unchanged at $405-410 per tonne fob.

Metal Bulletin will launch a weekly index for CIS export steel billet, on a fob Black Sea basis, beginning on May 15.

It was observed that the liquidity in the CIS export billet market required a more specific methodology and tailored calculation, and the index was developed after following research and consultation with the industry.

Juan Weik in Singapore contributed to this report.