GLOBAL BILLET WRAP: Prices fall on weak demand, cheaper scrap, Iran uncertainty

Steel billet prices in most markets were stable or continued to slide in the week from Monday May 28 to Friday June 1, due to thin trading activity, falling scrap prices, and uncertainty about the United States renewing its sanctions on Iran.

China was the exception, with domestic billet prices improving because of lower supply.

Southeast Asia’s billet imports were again affected by soft demand, and few offers were reported.

The latest offers from East Asia were at prices as low as $547 per tonne cfr Philippines, while CIS suppliers were asking for $560 per tonne cfr.

No Chinese export offers were reported because China’s domestic prices started improving early in the week. Previously, cheaper Chinese materials had pushed Southeast Asia’s prices down slightly during the week to May 28.

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

Filipino buyers still refrained from purchasing due to the rainy season in the country, while those in Indonesia were staying away from the market mainly due to the reduced activity caused by the Islamic holy month of Ramadan, which will end in mid-June.

“China’s domestic prices are continuing to rebound a little today, which may create some stability in [Southeast Asia’s import] prices soon,” a Vietnam-based trader said on Thursday.

China’s domestic billet segment began to recover from Tuesday onward [LINK], after the previous week’s downtrend. The country’s rebar market also moved up steadily during the week amid decreasing stockpiles.

Prices were 3,670 yuan ($573) per tonne on Friday, down by 50 yuan per tonne from a week earlier.

Low inventory levels might push the billet price up, sources said. Total inventory for the semi-finished product in Tangshan was 280,000 tonnes on Friday, down by 70,000 tonnes from a week before, according to a billet trader in the city.

Chinese mills were not planning to take export orders for billet due to the higher prices in the domestic market.

CIS, Turkey
CIS billet export prices kept sliding during the week due to sluggish trading and downward pressure from weaker Turkish scrap import prices.

Few deals were concluded because of the wide bid-offer spread.

CIS offers were mostly within the range of $510-515 per tonne fob Black Sea on Friday, down from $512-520 per tonne fob on Tuesday.

But buyers said the workable price was nearer $495-505 per tonne fob.

A 10,000-tonne cargo from Russia’s Rostov Electric Steel Mill (REMZ) was said to be sold to a trader at around $498 per tonne fob Black Sea. But REMZ prices are not included in Metal Bulletin’s assessment because the mill does not supply material regularly and its prices are lower than market levels.

After the latest assessment was filed on Wednesday, sources said that a 15,000-tonne cargo from Novolipetsk Steel (NLMK) was sold to Egypt at $502 per tonne fob Black Sea.

There were also rumors of bookings to Turkey at $500 per tonne fob, although sources could not confirm the information.

In Turkey, billet import prices continued to soften over the week ended Thursday, tracking the downturn in the country’s scrap import prices.

CIS suppliers lowered their billet offers to Turkey to $530-535 per tonne cfr, whereas Turkish buyers indicated their interest at $515-520 per tonne cfr.

No significant deals have been reported in recent weeks.

Meanwhile, Turkey’s export prices for billet also weakened in line with the poorer scrap values.

“Some Turkish mills have started to focus on exporting billet, while the rebar export market was slow,” a Turkish source said.

Some export bookings for Turkish billet were made to Egypt at $520-525 per tonne fob, the source added.

Middle East, North Africa
In the United Arab Emirates, uncertainty over the possibility of the US reintroducing trade sanctions on Iran kept billet import prices unchanged during the week ended May 29.

Iranian billet offers to the UAE stood at $520-530 per tonne cfr, but bids were only at $495-500 per tonne cfr.

As for rebar in the UAE, domestic prices for the long product rose amid optimism among producers about demand.

Iranian export prices for billet softened in the week ended Thursday due to the threat of US sanctions.

The few offers heard from Iranian mills were around $510-515 per tonne fob. But no transactions were heard within participants’ estimate of workable prices of $500-505 per tonne fob.

Egypt’s billet import prices also declined during the week to Thursday, due to limited demand and thin trading activity during Ramadan.

Deals were heard at $522-535 per tonne cfr, while offers for CIS-origin billet to Egypt were heard at $535 per tonne cfr.

Domestic rebar prices in Egypt were flat in the quiet market.

Jessica Zong in Shanghai, Vlada Novokreshchenova in Dnepr, Serife Durmus in Bursa, Felipe Peroni in São Paulo and Cem Turken in Mugla contributed to this report.