GLOBAL BILLET WRAP: Prices pick up on post-Ramadan restocking

Prices in most of the global steel billet markets showed positive dynamics in the week ended Friday June 15, supported by the upward trend in scrap pricing as well as gradual restocking by customers in the Middle East and Africa, with the Islamic holy month of Ramadan nearing its end.

Nevertheless, overall buying activity was still sluggish, with the majority of customers stepping back from the market on June 14-15 for the Eid Al-Fitr holiday, which marks the end of Ramadan.

CIS, Egypt
Russian billet producers were out of the market at the beginning of last week for their country’s Independence Day celebration, so billet offers were limited.

Nevertheless, some CIS suppliers managed to achieve higher billet sales prices last week, with a number of cargoes being sold within the range of $505-515 per tonne fob Black Sea.

Buying activity was mainly concentrated in North Africa, where customers started to restock because prices for domestic finished long steel products, as well as demand for them, were expected to rise after Eid Al-Fitr.

Early last week, several cargoes of Ukraine-origin billet were reported sold in Egypt at prices around $505 per tonne fob Black Sea.

Later in the week, deals from Russia were also reported concluded to this destination within the range of $510-515 per tonne fob Black Sea. But market participants suggested that some of these bookings could have been made at the end of the previous week.

Late in the week, market participants reported that traders selling material to Egypt were also concluding billet deals with CIS suppliers at $515 per tonne fob Black Sea. They noted that this would mean Egyptian customers would be ready to pay prices several dollars higher in the coming week.

Meanwhile, Turkish customers refrained from any billet bookings, preferring to assess the situation. But they continued their scrap purchases at higher prices.

Recent offers of billet from CIS mills were heard within the range of $515-520 per tonne fob Black Sea.

Iran
Besides CIS-origin material, Egyptian customers were also reported buying Iranian billet at a price equivalent to $530 per tonne cfr.

In total, Iranian suppliers sold around 100,000 tonnes of July-rolling billet at $505 per tonne fob.

Some of this material went to Southeast Asia, according to market participants.

Customers were trying to book as much as they could of Iranian material scheduled for shipment before August, because of the threatened reinstatement of trading sanctions on Iran by the United States. The Western country has withdrawn from the international deal on Iran’s nuclear-power program and is expected to renew its sanctions on Iran in August.

Despite this, market participants reported some bookings of August-rolling billet from Iran.

“It looks like traders are taking a long position on Iran for August production,” one trader said.

A large Iranian producer confirmed that it had sold such a cargo at $505 per tonne fob.

Market participants doubted that Asian customers would take the risk of continuing to buy Iranian billet under renewed sanctions, but they also assumed that buyers in the neighboring Gulf Co-operation Council nations (GCC) would find a way to arrange payments and shipments, and to continue the billet trade with Iran.

Southeast Asia
The market in Southeast Asia was largely quiet last week, with many buyers in a holiday mood.

Several countries in Southeast Asia celebrated the Eid-al-Fitr holiday on June 15, while Indonesia has its own national holidays from June 11 until June 20.

Besides that, in the Philippines, demand for billet was weak due to the start of the rainy season in the country and uncertainties in the international market.

A cargo of Russia-origin billet was nevertheless heard sold to the destination within the range of $545-550 per tonne cfr.

Despite the lack of buying activity in the region, suppliers kept their offer prices high. Chinese and Taiwanese material was heard offered in the Philippines within the range of $560-565 per tonne cfr, while Vietnamese billet was available at $575 per tonne cfr.

According to traders, however, these prices were unlikely to be achieved in the near term.

China
Billet prices in the Chinese domestic market were 3,720 yuan ($581) per tonne on Friday, 20 yuan per tonne higher than the Friday before.

The inventory for the product in Tangshan totaled 230,000 tonnes on Friday, down by 10,000 tonnes week-on-week, a billet trader in Tangshan told a local industry information provider.

No export offers were heard. Calculated on the basis of domestic prices, the export price for Q235 150mm billet would be $540-545 per tonne fob.

Jessica Zong in Shanghai, Cem Turken in Mugla, Serife Durmus in Bursa, Felipe Peroni in São Paulo and Fiona Lam in Singapore contributed to this report.