GLOBAL BILLET WRAP: Prices rise amid enlivened buying, higher scrap prices

Prices in the global steel billet market were mostly trending upward last week amid enlivened demand at some destinations as well as increased scrap prices, Metal Bulletin has learnt.

There were some markets in which prices remained unchanged week-on-week, but these were largely in Asia, where market participants have now broken off for the week-long lunar new year holiday, ending on February 21.

Turkey, CIS
Turkish billet prices rebounded last week, in line with recovering demand and stronger values for scrap and finished long steel, sources told Metal Bulletin.

Early in the week, CIS-origin billet was available to Turkish customers at $515-520 per tonne cfr.

A cargo of Ukraine-origin billet was reported sold to the country within that range, equivalent to $500-505 per tonne fob Black Sea. Several more lots were also sold by the same producer to Tunisia and Italy within the same price range.

By the end of the week, CIS billet offers to Turkey had gone as high as $530 per tonne cfr.

A cargo of Russian billet was heard sold to the destination at $525 per tonne cfr, equivalent to $510 per tonne fob Black Sea.

Sources reported that a Ukrainian mill sold billet to Turkey at $515-520 per tonne fob Black Sea. This could not be widely confirmed, although traders were said to have sold a cargo of CIS-origin billet to the same destination at $530 per tonne cfr.

At the same time, import scrap prices in Turkey rose by $4-5 per tonne over the week, with Metal Bulletin’s daily indices for US-origin HMS 1&2 (80:20) closing on Friday February 16 at $353.90 per tonne cfr, and Northern European HMS 1&2 (80:20) at $344.42 per tonne cfr.

Recent offers of billet from CIS mills were heard within the range of $510-520 per tonne fob Black Sea.

Middle East-North Africa

Iranian producers also followed the upward price trend and announced offers of April-produced billet at $505-510 per tonne fob late last week.

Meanwhile, recent bookings of March-produced material were reported done within the range of $490-495 per tonne fob earlier in the week, to the United Arab Emirates, Oman and countries in East Asia.

While a number of deals was heard done throughout the Middle East-North Africa region, Egyptian customers were largely inactive because the price gap in the country between imported billet and domestic rebar was growing.

CIS-origin billet was on offer to Egyptian customers at $530-540 per tonne cfr, sources said, equivalent to $510-520 per tonne fob Black Sea.

Local rebar prices in Egypt were unchanged on February 15 at E£11,950-11,980 ($675-676) per tonne, with no new prices having been announced since late November 2017.

In addition, the stock of imported billet at ports that had built up over previous weeks was said to be high.

Recent bookings of CIS-origin billet were reported done in the country in the past 10 days at $510 per tonne cfr.

“Even if you have material at $505 [per tonne] cfr, that will be difficult [to sell because] stocks are high,” one source said. “For the next delivery month, some may accept $515 per tonne cfr [in the] hope that local producers will increase rebar prices.”

Southeast Asia, China
In the Southeast Asian market, buying activity was limited last week due to the wide spread between bids and offers as well as week-long lunar new year holiday, which started on February 15.

Deals involving billet from the CIS region were concluded around $550 per tonne cfr to the Philippines over the past 10 days, sources said.

Indonesian buyers were heard to have bought more than 30,000 tonnes of cargoes from Oman and Bahrain, but market sources could not confirm the transaction prices.

Offers from Taiwan were heard at $545-550 per tonne cfr, up by $5 per tonne from a week earlier, but buyers in Indonesia and the Philippines considered these to be too expensive.

CIS-origin cargoes were offered at $545-550 per tonne cfr, while South African cargoes were offered around $535 per tonne cfr to Indonesia.

No offers from the Middle East were heard because most suppliers there were in no hurry to export and were bullish about prices after the lunar new year, traders in Asia said. Some Middle Eastern mills are also negotiating cargoes to ship in at the end of April and early in May, which is too far in the future for Southeast Asian buyers to consider, an Indonesia-based trader said.

No billet offers were heard from India because domestic rebar prices in the country remained robust.

Chinese mills remained out of the export market after abruptly exiting two weeks earlier amid improving domestic prices in China. Only one Chinese offer was heard at $570-575 per tonne cfr, but market participants said that it was unlikely to be a serious offer because it was too high for buyers to accept.

Buyers in Indonesia, Thailand and the Philippines indicated their interest at $535-540 per tonne cfr amid slow local downstream markets.

In the domestic market, Chinese mills were offering billet at 3,610 renminbi ($569) per tonne including VAT, unchanged week-on-week.

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

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