GLOBAL BILLET WRAP: Prices resume uptrend despite Chinese slowdown

The upward trend in steel billet market prices resumed last week in most global markets, despite signs of a slowdown in the Chinese steel market, sources told Metal Bulletin.

Continued supply problems in Ukraine and the absence of Chinese billet exports led to an improvement in sentiment, and market participants did not rule out further price rises in the next few days.

“Within the next couple of weeks, I believe global billet prices will reach $425 [per tonne] fob,” a source said.

Prices continued to be firm in the scrap market, with sources believing that prices might remain strong at least until the end of March.

In Northern China, domestic billet prices fell for several consecutive days as pessimism increased over the week, but saw a partial recovery on Friday.

Weakening demand for long steel products and increasing inventories have led market participants to expect a longer price drop in the rebar market, which was also reflected in billet prices.

At their lowest, billet prices dropped by 100 yuan ($15) per tonne on Thursday from the levels seen at the end of the previous week, to 3,100 yuan ($448) per tonne, including VAT.

But domestic billet prices edged up again at the end of last week, after statistics from the China Iron & Steel Assn showed a reduction in the country’s crude steel output.

The figures motivated a slight rebound in the futures and billet markets on Friday and, as a result, billet transactions were reported back at the level of 3,140 yuan ($454) per tonne, including VAT.

In India, few export deals were reported, with prices in a lower range than in the previous week.

A mill in southern India booked 15,000 tonnes of billet to an unknown location at $400-405 per tonne fob. This price was down from deals closed at $410-420 per tonne fob in the previous week.

Despite the lower price, mills in India’s northern region have been offering billet at $450-460 per tonne fob, but with no bookings being made.

Meanwhile, with the absence of Chinese mills in the export market, clients in Southeast Asia have purchased billet from Russia at around $440 per tonne cfr.

“If someone now has more than 20,000 tonnes available, he can easily sell to Southeast Asia at $410 [per tonne] fob Black Sea,” a source told Metal Bulletin last week.

CIS, Turkey
As supply remained tight over the past week, CIS billet prices continued to increase accordingly.

Steel producers in Ukraine continued to face supply constraints from blockades on railways in the east of the country, which have lasted more than one month.

Despite this scenario, a Ukrainian mill booked an order of 10,000 tonnes of billet to North Africa at $395-397 per tonne fob Azov Sea.

Meanwhile, Russian mills have already sold out most of their material, with rare offers being reported at $405-410 per tonne fob Black Sea.

In Turkey, buyers have shown reduced interest in importing billet, as companies preferred to focus on the deep-sea scrap market.

Billet import prices continued to rise, as offers mainly from CIS suppliers were heard at a minimum $425 per tonne cfr, but bids were at a maximum of $415 per tonne cfr.

Middle East-North Africe, Latin America
In Egypt and the UEA, buyers faced higher-priced offers from Iran and the CIS.

Billet offers from Iran were reported at $410-415 per tonne cfr in the UAE this week, compared with previous offers at $390-398 per tonne cfr.

Meanwhile, offers from CIS-based producers to Egypt were even higher, at $430-440 per tonne cfr.

Metal Bulletin’s price assessment for Egyptian billet imports was $415-430 on Thursday, up from $405-410 in the previous week, while import prices in the UAE were $410-415, from $390-398 – all on a per tonne cfr basis.

In Latin America, buyers were struggling to secure billet volumes, but continued high prices were an obstacle. In South and Central America, bids were heard around $410-420 per tonne fob, with at least one deal being closed.

“With China and Ukraine largely out of the market, buyers have very few options left, such as Iran and Russia,” a source said.

Vlada Novokreshchenova in Dnepr and Suresh Nair in Mumbai contributed to this report.

[The table that was originally published in this article had the February 27 assessment for South East Asia import prices for billet. This has been updated with the March 6 assessment.]