GLOBAL BILLET WRAP: Prices stay bullish on sustained demand
Global steel billet prices continued to climb this week on strong demand from buyers, who are hoping to secure volumes before prices move up further.
In a highly unusual move, billet traders are also trying to work arbitrage cargoes from the Middle East, the CIS region and India to China, which has typically been a net exporter of steel.
Billet prices were 3,930 yuan ($594) per tonne at 3pm on Friday December 8; this was 40 yuan per tonne higher than a week before.
No export offers were released last week because domestic prices rose on strong demand in the local market, sources said.
Billet import prices in Southeast Asia were up for the third consecutive week on strong demand.
Market sources said there was a marked increase in demand from buyers in Southeast Asia, who were looking for cargoes on fears of further price rises.
Position and mill cargoes from Russia, the Middle East and India were offered in the spot market at $515-535 per tonne cfr Southeast Asia.
Negotiations were mainly at prices around $515-520 per tonne cfr Southeast Asia for the Indonesia and Philippines markets, traders said. Bids were $505-515 per tonne cfr Southeast Asia.
Drops in China’s ferrous futures market caused sentiment to turn duller toward the end of last week, although demand remained strong, traders said.
“If China rebar futures continue on a downward trend, there will be trouble for market participants who fixed cargoes at high prices mid-week,” a trader based in Southeast Asia said.
Strong spot demand from China also supported prices, with traders looking to fix billet cargoes there on account of firm domestic billet and rebar prices.
Deals were done at $490-500 fob Black Sea in the earlier part of the week, including a cargo to Italy, but offers increased to $510 per tonne fob Black Sea by Thursday.
Traders were willing to pay $500 per tonne fob Black Sea, in view of higher ferrous scrap prices in Turkey, as well as the bullish sentiment in the market. Buyers were also submitting higher bids.
Metal Bulletin’s weekly CIS Billet Index increased by $10 per tonne, to $476 per tonne fob Black Sea on December 4.
Turkish billet prices continued to increase last week, while imported scrap prices in the country had been rising since the week before, sources said on December 7.
Metal Bulletin’s weekly price assessment for billet imports into Turkey was $510-525 per tonne cfr, up from the $490-500 per tonne of the previous week.
Suppliers in the CIS region were offering material at around $510-525 per tonne cfr. However, demand for material was very weak because mills in the country were focusing on scrap bookings instead of billet.
Meanwhile, domestic and export billet prices in Turkey increased too.
Metal Bulletin’s weekly price assessment for domestic billet in Turkey on December 7 was $515-525 per tonne ex-works, up from $490-500 per tonne.
A steel producer in the Iskenderun region was heard selling 85,000 tonnes of billet at $515 per tonne ex-works earlier in the week. The same mill then sold 15,000 tonnes of billet at $520 per tonne later in the week.
The most recent sale from the mill was for 26,000 tonnes and was priced at $525 per tonne ex-works, Metal Bulletin has learnt.
The weekly price assessment for billet exports out of Turkey on December 7 was $520-530 per tonne fob, up from $500-510 per tonne.
Steel billet import prices in Egypt increased last week and several deals were heard, while local rebar prices remained unchanged.
Metal Bulletin’s weekly price assessment for Egyptian billet imports was $505-510 per tonne cfr on December 7, narrowing upward from $495-510 per tonne cfr.
Billet offers from the CIS region varied within the range of $510-535 per tonne cfr through the week. The latest offers were $530-535 per tonne cfr.
A trader believed that $520 per tonne would be a workable price this week.
Several cargoes totaling 20,000 tonnes of CIS-origin billet from traders were booked at $505-510 per tonne cfr.
Meanwhile, local rebar prices in Egypt remained unchanged last week because no new prices were announced.
Metal Bulletin’s weekly price assessment for domestic rebar in Egypt was static on Thursday at E£11,950-11,980 ($670-672) per tonne ex-works, including 14% VAT.
Market participants did not expect local rebar prices to increase because they are already high.