GLOBAL BILLET WRAP: Prices in major markets continue to fall

Billet prices in the global markets except India continued to fall during the work week from Monday March 26 to Friday March 30 due to negative sentiment caused by the uncertainty over the United States' Section 232 tariffs.

Demand was sluggish in major markets such as Turkey, the Commonwealth of Independent States, the Middle East and North Africa, and Southeast Asia over the past week, and no significant transactions were heard in most of those regions.

Domestic billet prices in the country’s Tangshan region reached 3,340 yuan ($531) per tonne ex-works on March 30, a decline of 170 yuan per tonne from the week before.

Southeast Asia

Fears of a trade war between the United States and China coupled with weaker pre-holiday demand led to a weakening of prices for billet in Southeast Asia over the past week.

The offers for Chinese billet in the Philippines fell to $530-540 per tonne fob China – about $550-560 per tonne cfr Southeast Asia, based on a freight rate of about $20 per tonne.

These offers narrowed further to about $550 per tonne cfr Southeast Asia after ferrous futures in China plunged on March 23.

Market sources said there were even offers as low as $540 per tonne cfr Southeast Asia from traders who were aggressively short-selling.

About 60,000 tonnes of May-shipment Iranian billet were heard offered at $535 per tonne fob via a tender, while India-origin materials were offered at $540 per tonne fob.

Demand in Indonesia was weak because buyers had secured large quantities of billet for May arrival. The upcoming Islamic holy month of Ramadan, which begins in mid-May, and the subsequent Hari Raya holiday a month after have also dampened demand for cargoes scheduled for delivery over the May-June period, since buyers will not need any then.

“There are not many buyers in Indonesia now, even with traders offering billet aggressively at $550 per tonne cfr Southeast Asia. Buyers are expecting further price drops,” a trader based in Southeast Asia said.

Demand from Indonesia is only expected to resume after the holidays.

In the Philippines, many buyers began to exit the market on March 23 since they took this whole week off to mark the Christian Holy Week. Market participants expect buyers to be back in the market next week.

CIS, Middle East-North Africa
There was not much activity in the CIS export billet market over the past week, and mills reduced their billet export offers to $520-535 per tonne fob from $550-555 per tonne fob.

But there were not many customers willing to purchase material – they preferred to wait until after the Easter holidays for a clearer trend, Metal Bulletin was told.

Some market participants expect prices to keep declining, since Turkey decreased long steel prices. If it is unable to sell even at lower levels, then billet prices will have to drop, according to these sources.

A trader claimed that he booked billet from a CIS mill at $510 per tonne fob. However, this could not be confirmed by the time of publication.

Billet traders are not taking positions at the moment. There were some bids heard at $515 per tonne fob, but mills said $520 per tonne fob was the minimum they could accept, sources said.

A cargo of CIS-origin billet was reportedly sold to North Africa by traders at the price equivalent to $520-525 per tonne fob, while Egypt and Turkey were not active in the market.

Prices for imported billet in the United Arab Emirates fell last week on lower offers, and no major deals have been heard.

Chinese mills were offering steel billet at $525-530 per tonne cfr to the UAE, and Oman was offering billet at $550-560 per tonne cfr.

Iran has not sent any offers because of the Norooz holidays in the country. Billet buyers in the UAE preferred to wait for new prices from Iran before placing orders.

The import prices for steel billet in Egypt fell last week on declining demand.

CIS-origin billet was on offer in Egypt at $550-555 per tonne cfr, down from $560-575 per tonne cfr.

Meanwhile, Turkish billet prices drifted lower over the past week amid sluggish demand for both domestic and imported material.

CIS billet suppliers reduced their offers into Turkey to $550-560 per tonne cfr, but sources said Turkish buyers were not interested in paying any more than $540 per tonne.

“Turkish billet export offers fell to $575-585 per tonne fob levels, but I don’t think Turkey will offer much quantity, as demand is lower,” a trading source said.

Prices in India for local secondary steel billet increased by about 100 rupees per tonne, with demand for both semifinished and finished products remaining steady and the number of inquiries rising.

“The mood in the secondary long steel products segment is very positive. Inquiries for billets are improving with rebar makers looking to increase their billet purchases,” an official from a billet mill in the central Indian state of Chhattisgarh said.

“Even if a fraction of the current inquiries translate into sales, the prices of both billet and rebar will move up by more than 1,000 rupees per tonne by next weekend,” he added.

No primary billet export transactions were reported last week.

According to one market participant, fresh primary billet export transactions are expected in early April.

Jessica Zong in Shanghai, Fiona Lam in Singapore, Serife Durmus in Bursa, Vlada Novokreshchenova in Dnepr and Felipe Peroni in São Paulo contributed to this report.

Cem Turken