GLOBAL BILLET WRAP: prices keep climbing as buying interest persists

Global steel billet prices continued to rise in most markets in the week to Friday December 15 as customers continued to show interest in importing material.

The availability of billet was affected in the Middle East, due to a fire at one of Saudi Iron & Steel Co (Hadeed)’s EAF mills and supplies were also limited in China, where inventories in the Tangshan spot market continued to drop, having fallen 35,000 per tonnes to end the week at 160,000 tonnes.

Domestic billet prices were 3,950 yuan ($597) per tonne at 3pm on December 15, down by 60 yuan per tonne in the last two days of the week after the price had risen to 4,010 yuan per tonne from 3,930 yuan per tonne on December 8.

With higher prices and low inventories, Chinese buyers turned to import material.

A 30,000-tonne Iranian cargo for February shipment was heard sold to the country at around $480 per tonne fob. The estimated cost of freight is around $30 per tonne.

Another Iranian cargo of the same tonnage, but for January shipment, was head booked at as high as $500 per tonne fob.

Meanwhile, no export deals were heard done from the country this week.

Southeast Asia
In Southeast Asia billet prices rose at the end of the week following news of the Hadeed fire in Saudi Arabia, which reduced the availability of material from the Middle East.

“About 200,000-250,000 tonnes of billet cargoes have been affected by the fire. The number could be higher if rebar and wire rod production is also disrupted,” a trader based in the Philippines said.

In these conditions, negotiation levels for other origins, in particular India and Russia, were at $530-535 per tonne cfr Southeast Asia on December 15, compared with $520-525 per tonne cfr Southeast Asia on December 14.

“Sellers are now offering billet cargoes at $535-540 per tonne cfr Southeast Asia, riding on the back of bullish sentiment in the spot market,” the Philippines trader said.

CIS, the Middle East-North Africa

CIS suppliers also moved billet offers further upwards last week, to $515-520 per tonne fob Black Sea, against $500-510 per tonne fob in the previous week, following a rise in scrap quotes early last week.

However, deals have not exceeded $510 per tonne fob Black Sea as yet, sources told Metal Bulletin.

In Egypt, billet offers from the CIS region have been coming in at $527-530 per tonne cfr through the week. The estimated cost of freight from the Black Sea basin to the destination is around $20 per tonne.

Several cargoes, totaling 20,000 tonnes, of CIS-origin billet from traders were booked at $525-530 per tonne cfr, sources told Metal Bulletin.

A separate deal for 5,000 tonnes of billet from Ukraine was heard at $520 per tonne cfr.

Meanwhile, in Turkey, interest in imported billet was muted, with customers ready to pay no more than $510 per tonne cfr, while offers were heard at $525-530 per tonne cfr.

“Scrap prices are now more competitive, so Turkish buyers are likely to buy domestic material rather than import from the CIS region,” a source said.

Metal Bulletin’s daily index for Northern Europe-origin HMS 1&2 (80:20) scrap was $346.20 per tonne cfr on December 15, flat since December 11.

And the daily index for United States-origin scrap was also unchanged, at $356.37 per tonne cfr, leaving the premium for US material over Northern European scrap at $10.17 per tonne.

Jessica Zong in Shanghai, Paul Lim in Singapore,Serife Durmus in Bursa, Viral Shah in London and Felipe Peroni in Brazil contributed to this report

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