GLOBAL BILLET WRAP: Prices rise following higher scrap costs

Steel billet prices increased in most regions last week, despite a slight weakening in China’s domestic market, amid higher scrap prices and reduced supplies.

Turkish mills were active in the market last week, buying August-shipment cargoes of scrap, which led prices of the raw material to increase further.

Metal Bulletin’s daily index HMS 1&2 (80:20) from USA was $302.39 per tonne cfr Turkey on Friday July 7, up from $296.67 per tonne cfr Turkey on June 30.

And iron ore prices had a small decline compared with the previous week, but remained close to $63 per tonne cfr China.

Billet prices in the Northern Tangshan region ended the week at 3,280 yuan ($482) per tonne ex-works, a decrease of 60 yuan ($9) from the previous week.

The fall was due to lower demand from re-rolling companies, although inventories were said to be at reduced levels.

Traders in the Tangshan region reported interest in selling material produced in other countries, such as Iran, India or the CIS, mostly to Southeast Asia, as a way to keep their export volumes going.

Southeast Asia
In Southeast Asia, prices jumped amid limited supplies, as Chinese mills continued to be mostly out of the export market.

Metal Bulletin’s weekly price assessment for billet imports into Southeast Asia went up to $430-435 per tonne cfr, from $415-423 per tonne cfr a week earlier.

Offers from China were heard in the region at $460-480 per tonne cfr, which led clients to quote the material from suppliers in other regions.

In the Philippines, a 10,000-tonne cargo of Vietnamese material was booked at $440 per tonne cfr, while another booking of similar volumes from Thailand was reportedly sold at about $445 per tonne cfr.

Offers from Russia, Ukraine, Malaysia and Brazil were heard in the country within the $445-450 per tonne cfr range.

Indonesian customers are still reassessing conditions, as they only recently came back to the market after the holy month of Ramadan.

No activity was seen in other markets such as Vietnam, Thailand and Malaysia, as trading of long steel products remained weak.

CIS, Egypt
Billet prices in the CIS region continued to rise, influenced by reduced supplies from mills in the region and by the growth in scrap prices, which led re-rollers to purchase billet instead. 

At the beginning of the week, news circulated about two deals closed in the past week, one at $410 per tonne fob Black Sea from Ukraine, and another at $411 per tonne fob Black Sea for Russian material.

Later in the week, offers from CIS mills increased to $410-420 per tonne fob Black Sea. Sources believe deals would be possible at as high as $415 per tonne fob Black Sea.

Similarly, in Ukraine, offers were reported at $410 per tonne fob Azov Sea, which is equivalent to $415 per tonne fob Black Sea, with bids coming at $405 per tonne fob Azov Sea.

Then on Friday, a deal from Ukraine’s Elektrostal was heard closed at $415 per tonne fob Azov Sea, confirming the upward trend in prices.

The market also felt the effect of higher demand from Egyptian customers, where the government implemented temporary anti-dumping duties on rebar imports from three countries, which led local companies to increase their billet purchases.

In this context, a cargo of 5,000 tonnes of Ukrainian billet was sold into Egypt last week at $417 per tonne fob, or the equivalent to $432 per tonne cfr.

After that, traders offered material to Egypt at $440-445 per tonne cfr, and although the offers were not accepted, market participants believe local prices will continue to increase, as demand remains strong.

Turkey, UAE
The increase in billet prices in the CIS region was the main reason behind an increase in billet import prices last week, which jumped to $425-430 per tonne cfr on Thursday July 6, from $410-415 per tonne cfr on June 29. 

Domestic billet prices in the country also soared, after long steel producers raised their offers to the local market.

A local long steel producer in the Iskenderun region sold around 10,000 tonnes of billet at $450 per tonne ex-works last week.

The weekly price assessment for billet exports out of Turkey rose to $450-460 per tonne fob on Thursday, up from last week’s $410-415 per tonne.

In the UAE, offers were heard at $395-400 per tonne cfr from Iranian mills, the same level as the previous week, but the import market was weak.

Market participants held back from purchasing material as there were expectations of an increase in domestic rebar prices.

Vlada Novokreshchenova in Dnepr, Jessica Zong in Shanghai, Suresh Nair in Mumbai and Cem Turken in Mugla contributed to this report.