GLOBAL BILLET WRAP: Prices go in opposite directions in major markets
Global billet prices have shown mixed dynamics over the past week, as an uptick in Turkish scrap prices dragged up CIS and Turkish billet prices, while Southeast Asian and UAE billet prices were down due to poor sentiment.
Billet prices in the Chinese domestic market were stable, leading to a wait-and-see attitude in the spot market.
The domestic billet price in China was 3,850 yuan ($584.44) as of 3pm local time on Friday November 24, 20 yuan per tonne higher than the previous Friday.
The absence of any movement in the billet market also led to some uncertainty about the direction for spot rebar prices, market participants said.
Import prices for billet in Southeast Asia weakened further over the past week on sustained bearishness in the downstream long steel markets.
Cargoes from Middle Eastern and Russian mills were being offered in the spot market at $485-490 per tonne cfr into Southeast Asia.
End-users were looking to buy at $470-475 per tonne cfr Southeast Asia, but sources said this was not workable apart from Iranian cargoes.
Market sources said transactions were likely to take place at $480-490 per tonne cfr Southeast Asia.
Downstream demand among re-rollers remained weak in view of falling rebar prices in Asia, which had most re-rollers looking for spot billet bargains.
While recent news of production cuts in China, as well as increasing prices for ferrous scrap, have boosted sentiment in the spot market, these have yet to translate into any increases in billet prices in Asia, which have been on a steady downtrend since the second half of September.
Market sources are harboring hopes that reduced long steel exports from China during the winter period will support billet prices and lead to prices climbing out of the trough. But the approaching year-end holiday season is expected to dampen spot trading activity in Asia.
CIS, Turkey, Egypt
The downward trend that has persisted in the CIS steel billet export market since late September was interrupted late last week as mills increased offer prices following a $10-per-tonne surge in Turkish import scrap prices.
However, some market participants believe higher prices will be accepted in the near term.
“Prices [near $460-465 per tonne fob Black Sea] should become a reality soon,” another trader said, adding that there had already been some bookings to other destinations at close to $460 per tonne fob.
One cargo of Ukrainian billet was sold to Turkey at $470-475 per tonne cfr to Turkey, while another, totalling 10,000 tonnes, was sold to Egypt within the same range.
Later in the week a 15,000-tonne cargo of CIS billet was reported sold to Egypt at $465-470 fob Black Sea ($485-490 per tonne cfr), although it could not be widely confirmed in the market, as some sources doubted that such a level could be achieved.
One trader was offering billet at $480 per tonne cfr to Egypt, but the offer was rejected as too high.
Another trader described $465 per tonne fob as “wishful thinking”.
In Turkey, CIS-origin billet was offered at $485 per tonne cfr, sources said.
However, some doubted it and said the Turks were unlikely to accept $485 cfr, as recent bookings were at $470-475 cfr.
Turkish domestic and export billet prices also increased in line with rising imported scrap costs.
However, the demand for imported billet was still sluggish in Turkey due to the country’s inward processing regime, under which importers must export the same amount of finished steel to avoid import taxes, sources told Metal Bulletin.
Turkish mills currently prefer to buy scrap over billet due to weak demand.
Domestic billet prices have risen to $500 per tonne ex-works from $485 per tonne. However, only a few deals have been done at these levels, a Turkish source told Metal Bulletin.
“I heard only a few 2,000-3,000-tonne deals,” he said. “I think the buyers are only purchasing for their urgent needs,” he added.
The steel billet import markets in the UAE and Saudi Arabia remained weak over the past seven days, despite some prices falling.
Iranian mills were offering billet at $465-490 per tonne cfr to the UAE, but no deals were heard.
“The market prefers to wait [until closer to] the end of the year,” one market participant said.
Metal Bulletin’s weekly price assessment for UAE billet imports was $465-480 per tonne cfr on Tuesday, November 21, down from $480-490 per tonne cfr.