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Global billet: Most markets drop further

Apr 16, 2018 | 09:59 AM |

Tags  China billet prices, Southeast Asia billet prices, CIS billet prices, Middle East billet prices, Felipe Peroni


SÃO PAULO — Prices decreased in most markets last week, with demand for rebar remaining subdued in many regions while a recovery in prices for semifinished material in China led to improved sentiment in some countries later in the week.

Raw materials
Global scrap prices showed different trends last week, with prices in Turkey being volatile, while decreases were seen in India and Taiwan.

Metal Bulletin’s daily ferrous scrap index for an 80:20 mix of No. 1 and No. 2 heavy melt of northern European origin was $350.18 per tonne cfr Turkey on Friday April 13, up by only $0.49 per tonne from the previous week but including a $5 per tonne fall on Wednesday.

Iron ore prices also showed a slight recovery, with Metal Bulletin’s daily index of 62% iron material reaching $64.96 per tonne cfr Qingdao on Friday, up by $1.39 from the previous week.

China
Chinese billet prices reached 3,480 yuan ($554) per tonne this week, an increase of 70 yuan from the previous week.

Domestic demand for the semifinished product was improving throughout the week as some re-rolling companies were heard to be resuming production.

Most of the rise occurred on Tuesday, motivated by better sentiment in the rebar market early last week.

On the other hand, billet inventories in the country’s northern Tangshan region reached 730,000 tonnes on Friday, an increase of 100,000 tonnes from the previous week, according to a billet trader.

Export offers from the country were heard at $525 per tonne fob but no deals were closed.

China’s major mills increased their crude steel output rates in mid-March after the ending of restrictions on production put in place for the winter heating season in the northern region.

Southeast Asia
Until early last week, an influx of Chinese offers to Southeast Asia put pressure on the region’s billet import prices, which decreased by $5 week on week to $535-545 per tonne cfr on April 9.

Buyers in Indonesia and the Philippines had been looking to buy material at around $530 per tonne cfr. But late last week, Chinese billet sellers retreated again from the export market due to the rebound in their domestic prices.

Few spot offers were heard from China in the latter part of the week and prices were estimated by traders at $540-545 per tonne cfr in Southeast Asia.

Buyers in the Philippines purchased cargoes from the Commonwealth of Independent States and East Asia at $545 per tonne cfr, according to sources.

In Indonesia, demand continued to retreat and while offers of Russia-origin billet were made at $550 per tonne cfr, the price was not accepted.

An Indonesian reroller reportedly concluded a deal with an Iranian producer at around $525-530 per tonne cfr for wire rod rolling material but the information was not widely confirmed.

But many market participants said that this price was too low, considering freight costs of $25 per tonne.

CIS, Middle East-North Africa
Few deals and offers were reported from the CIS market last week amid weak demand and different price expectations among buyers and sellers.

Offers from Russian mills were heard at $525 per tonne fob Black Sea but companies were ready to give discounts if firm offers were made.

There were rumors of bookings within the range of $510-525 per tonne fob Black Sea, but the information was not widely confirmed by market sources.

Offers to Turkey were heard at $515-525 per tonne fob but buyers were not willing to pay more than $505 per tonne fob for the product due to the weak demand for long steel in the country.

Some market participants believed that a viable price would be $505-510 per tonne fob Black Sea but other sources have said that no bookings could be made at prices lower than $520 per tonne fob.

“The billet market will not continue to go down,” a trader said.

In Turkey, billet export and import prices continued to fall due to weak demand and lower sentiment amid volatile scrap import prices.

A few deals in the country were reported at $525-530 per tonne cfr Turkey last week, although some buyers were bidding only $520 per tonne cfr.

Meanwhile, domestic billet offers were assessed at around $540-550 per tonne ex-works on Thursday, but buyers were heard pushing for a price of $530-535 per tonne ex-works.

Domestic rebar prices in Turkey weakened last week but remained above the level of $570 per tonne ex-works.

In Egypt, domestic rebar prices dropped due to low demand, and this affected rerollers’ ability to buy billet at the current prices.

Market participants in the country believed that rebar prices would continue to fall due to weakening demand and the current raw materials prices.

But billet offers to the country remained stable in the range of $540-545 per tonne cfr, mainly from CIS producers, which led the market to a standstill.

“Demand is very weak. Rebar prices are falling, and producers made some high-priced deals previously [and] they need to compensate. So they are waiting for billet prices to fall,” one trader said.

From Iran, offers of billet were reported at $500-510 per tonne fob, but bids came no higher than $495-505 per tonne fob. No bookings from the country were confirmed.

Vlada Novokreshchenova, Dnepr, Ukraine; Jessica Zong, Shanghai; Fiona Lam, Singapore; Serife Durmus, Bursa, Turkey; and Cem Turken, Mugla, Turkey, contributed to this article.


 
Felipe Peroni
felipe.peroni@metalbulletin.com



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