GLOBAL BILLET WRAP: Prices increase on Chinese market, higher demand
Steel billet prices increased in most global regions last week, following consecutive rises in the Chinese billet market and better demand in some importing countries.
On the raw materials side, ferrous scrap prices increased early in the week, due to the continued strong demand from Turkey. But later in the week, the market was cooled by developments in a trade case in the USA against imports of Turkish rebar and the proximity of the Ramadan slowdown in the Islamic world.
As a result, Metal Bulletin’s daily ferrous scrap index for HMS 1&2 80:20 (North Europe material) ended the week at $264.91 per tonne cfr Turkey on Friday May 19, down from $266.92 per tonne cfr a week earlier.
Billet prices in China rose by 60 yuan ($9) per tonne over the weekend of May 13-14, and rose by a further 10 yuan ($1.45) per tonne on Monday, reaching 3,020 yuan ($438) per tonne.
Following active trading in the rebar futures market, billet prices fell by 30 yuan ($4) late on Tuesday, only to rise by 50 yuan ($7) the following day, hitting 3,040 yuan ($441) per tonne in the middle of last week.
On Friday, another surge in the futures markets led billet prices to increase further, and the material was traded at 3,080 yuan per tonne ($447).
In Southeast Asia, market participants reported a higher number of deals being closed, although prices remained largely unchanged.
In the Philippines, news spread of one cargo of China-origin billet being sold at $410 per tonne cfr Manila, while another booking of Japan-origin billet was made at $405 per tonne cfr Manila. Both deals were closed late in the previous week.
Previously, buyers in Indonesia, Thailand and The Philippines had been expecting prices lower than $400 per tonne cfr.
Metal Bulletin’s weekly price assessment for Southeast Asia billet imports was unchanged on Monday at $400-410 per tonne cfr.
Trading activity remained strong in the middle of the week, and another deal for a 15,000-tonne cargo of 150mm billet from Russia was heard below $410 per tonne cfr in Indonesia.
Meanwhile, offers from China continued to move up as the week advanced, following rises in the Chinese spot market.
On Thursday, Chinese offers in The Philippines were $430 per tonne cfr, and were up to $440 per tonne cfr on Friday, but buyers were sceptical that such high prices could be sustained.
“Customers here are still hooked by that booking [made at] $410 [per tonne] cfr last week, and nobody is convinced about these higher prices from China,” one trader in Manila said on Friday.
Export prices in the CIS region also improved early in the week amid stronger scrap prices and improved demand from Turkish buyers.
Urkaine’s Elektrostal sold various batches of material to Turkey, Italy and North Africa at $385 per tonne fob Azov Sea, which would be equivalent to $390 per tonne fob Black Sea.
There were also rumours of Ukraine-origin billet trading at $415 per tonne cfr, the equivalent of $395 per tonne fob.
Metal Bulletin’s CIS export billet index was $395 per tonne fob Black Sea on Monday, up from $390 per tonne fob in the previous week.
During the week, prices remained largely stable from what was seen on Monday.
An offer from Elektrostal was heard at $390 per tonne fob Mariupol, equivalent to $395 per tonne fob Black Sea.
Also in Ukraine, ArcelorMittal Kryvyi Rih offered material at $400 per tonne fob, while Russia’s Evraz offered at $405-410 per tonne fob Black Sea.
However, no deals were heard closed from these two companies last week.
In the opposite price direction, rumours started circulating about a booking of unknown volumes from a Russian company at $390 per tonne fob.
A Turkish source also heard about billet sales from a producer in the CIS region at $388 per tonne fob last week. Freight costs to Turkey are estimated to be $15 per tonne.
An Italian supplier was heard selling about 5,000 tonnes of billet into Turkey at $415.50 per tonne cfr this week.
Metal Bulletin’s Turkey import billet price increased by $5-10 per tonne this week, to $410-415 per tonne cfr on May 18.
Metal Bulletin launched its CIS export billet index on May 15, on an fob Black Sea basis. This replaces the weekly price assessment of CIS billet exports.
The publication of the new index follows a comprehensive month-long consultation period. The index will be published weekly on Mondays, or on the next working day in the event that a Monday falls on a UK public holiday.
Offer prices from Iran also followed the same trend as those in other markets, and showed a significant increase last week.
Offers from Iran to the UAE were $400-405 per tonne cfr on May 16. Previous offers were heard around $385-395 per tonne cfr.
Despite the higher prices, buyers in the region were planning to book billet material from Iran, because of the quick delivery available.
In Egypt, import billet prices increased amid bookings of CIS material and an improvement in local rebar demand.
A shipment of 10,000 tonnes from the CIS region was booked in Egypt at $417-418 per tonne cfr.
Vlada Novokreshchenova in Dnepr and Juan Weik in Singapore contributed to this report.