GLOBAL BILLET WRAP: Signs of optimism emerge despite lingering uncertainty

Billet prices in most of the world’s major markets continued to show signs of recovery this week, despite the uncertainty created by the Chinese market and low iron ore prices.

A positive trend was supported by reduced availability of the material from the CIS region as well as improved sentiment in the scrap market and enlivened buying in Turkey in the middle of the week.

Chinese billet prices started the week at 2,920 yuan ($423) per tonne including VAT.

On Wednesday, the price rose to 2,970 yuan ($430) per tonne, supported by increased buying activity and a rebound in rebar futures.

The decreasing rebar inventory among steel mills and in the spot market was also regarded as giving support to prices.

Later in the week, the billet price dropped somewhat, ending at 2,950 yuan ($427) on Friday amid weaker demand and uncertainty in the spot rebar market.

In Eastern China, spot rebar prices dropped amid lower futures and weak demand.

Meanwhile, in Northern China, prices moved up slightly with the drop in inventories, although many buyers also suspended their procurement activities.

Offers of Chinese Q223-grade 150mm billet export were heard at $400 per tonne fob late in the week.

Some traders offered Q235-grade 120-130mm billet for short-selling cargoes or inventory products at $400-405 per tonne fob.

Southeast Asia
In Thailand and Indonesia, the latest billet offers from China varied between $410 and $420 per tonne cfr.

However, as the rebar market in most of the Southeast Asian region has been under pressure from low demand and a downward price trend in recent weeks, customers were looking for billet prices below $400 per tonne cfr to allow them to make a profit.

Rumours spread around the market about Iranian billet being sold at around $390 per tonne cfr in Indonesia and Malaysia early in the week, with offers at the same price in Thailand.

Late in the week, a 10,000-tonne cargo of 150mm and 180mm China-origin billet was heard sold to Indonesia at $410 per tonne cfr.

In the Philippines, Chinese Q275-grade billet of 120-130mm was heard available at $425-430 per tonne cfr, sources said.

Some traders, however, were short-selling and offering material to the country at $410-415 per tonne cfr.

On Tuesday, news emerged about a short-selling deal being closed at only $400 per tonne cfr Manila for a 5,000-tonne cargo of 150mm, Q235-grade billet from China.

Later in the week, 5sp-grade Japanese billet was heard sold to the Philippines at $405 per tonne cfr.

In Taiwan, Japanese material was heard changing hands at $390-395 per tonne cfr.

CIS, Middle East-North Africa
The CIS export billet market was quiet this week due to national holidays on May 8-9.

Most Russian suppliers were out of the market, but were expected to come back with new offers on May 15 or 16.

Meanwhile, prices had strengthened somewhat by May 12, supported by the reduced availability of the material and improved fundamentals in the scrap segment.

The latest offers from Ukrainian steelmaker Elektrostal were heard at $390 per tonne fob Azov Sea or $395 per tonne fob Black Sea.

The supplier finally sold material at $385 per tonne fob Azov Sea.

In Egypt, a deal for 10,000 tonnes of Ukraine-origin billet was heard at $418 per tonne cfr.

The estimated cost of freight to the destination is around $20 per tonne.

In Turkey, CIS-origin billet was on offer at $410-415 per tonne cfr. However, Turkish buyers were still looking for prices of less than $400 per tonne.

In the UAE, Iranian billet was on offer at $385-395 per tonne cfr this week, but no deals were heard.

“[The Islamic holy month of] Ramadan is coming, so we are not planning to book anything,” a UAE billet importer said.

Metal Bulletin’s weekly price assessment for UAE billet imports was $385-390 per tonne cfr on Tuesday, the range narrowing downward from $385-400 per tonne cfr.

Despite there being little interest from UAE customers, Iranian suppliers have recently been quite active in the other Persian Gulf markets.

A large tonnage of Iranian billet was reported sold in the region at around $375 per tonne fob southern ports, Metal Bulletin learnt.

Other regions
In Latin America, billet export offers were reported at $395-410 per tonne fob, with no new bookings heard done this week.

Metal Bulletin’s weekly price assessment for Latin American billet remained flat at $395-410 per tonne fob on May 12.

In India, prices also remained unchanged, with no offers reported. Indian mills preferred to sell finished long steel products in the domestic market rather than export billet at low prices, a market participant said earlier.

India’s billet export price was $370-380 per tonne fob, unchanged week-on-week.