Weekly round-up: Asian, CIS billet prices weaken; Iran export sentiment improves

• Chinese steel weakness pressures export billet offers
  
  
• Strait of Hormuz traffic supports improving export sentiment
  
  

Global billet markets remained under mixed pressure this week as weak steel demand in Asia and the CIS contrasted with improving export sentiment in Iran. Chinese and CIS billet prices softened amid subdued buying activity, seasonal demand weakness, and lower scrap prices, prompting mills to adjust offers downward to stimulate sales. In contrast, Iranian suppliers gradually resumed export activity as easing geopolitical tensions and improving shipping conditions through the Strait of Hormuz supported market confidence.

Turkish deep-sea imported scrap prices remained under pressure this week as weak finished steel demand, softer rebar prices, and limited buying activity weighed on sentiment. HMS 80:20 prices declined to around $383/t CFR Turkiye, while mills continued to push for lower scrap prices to protect margins amid weak steel sales.

The scrap-to-rebar spread narrowed to $190-195/t, leading buyers to target HMS 80:20 at $370-375/t CFR to restore profitability. Meanwhile, Turkish billet export prices were heard at around $542/t FOB.

Asian billet market

Asian billet export prices weakened this week as softer Chinese steel prices and subdued regional demand weighed on market sentiment. Chinese mills lowered 3SP billet offers for August-September shipment to $460-462/t FOB from $468-470/t FOB a week earlier, with some offers reported as low as $460-462/t FOB.

The decline was driven by weaker domestic market fundamentals, with SHFE rebar futures falling by RMB 30-40/t ($4-6/t) to RMB 3,144/t ($462/t) and Tangshan billet prices easing by RMB 40/t ($6/t) to RMB 2,970/t ($437/t), reflecting seasonally weak steel demand in China.

Regional buying activity remained sluggish as most importers delayed purchases in anticipation of further price corrections. In Southeast Asia, open-origin 5SP billet offers eased by $8-10/t w-o-w to $485-488/t CFR, while Chinese 3SP billet in Taiwan declined $5-10/t to around $480-485/t CFR. The rainy-season construction slowdown continued to suppress demand, prompting re-rollers to limit purchases to immediate requirements and maintain low inventories.

In Indonesia a major steel mill reduced its September shipment offers by $3-4/t to $480-482/t FOB, although higher production costs prevented deeper price cuts. Market participants also noted that buyers were monitoring the return of Iranian billet exports before making fresh bookings.

Outside the region, an unconfirmed transaction for 50,000 t of Chinese billet was reportedly concluded with Saudi Arabia at around $520/t CFR.

An India-based billet exporter said, "The market is reacting more to offers than actual supply. None of the proposed Iranian or UAE mills is expected to start production for at least the next three months. These offers seem to be more of a strategy to push prices lower than an indication that additional billet is actually available."

CIS billet market

CIS billet export sentiment remained weak this week as subdued buying interest, lower Turkish scrap prices, and the seasonal summer slowdown continued to weigh on the market. Trading activity remained limited, prompting Russian mills to gradually lower offers to attract buyers.

The Black Sea billet export price fell to $475/t FOB, down from $482/t FOB a week earlier. Russian billet offers were heard at $480-482/t FOB, while offers to Egypt stood at $510-520/t CFR, equivalent to $475-480/t FOB. Elsewhere, activity in the Black Sea remained subdued, with only one billet transaction of around 25,000-30,000 t reported during the week. Limited buying interest continued to pressure prices, pulling Black Sea FOB billet values down to around $475/t from approximately $490/t a week earlier.

Turkish buyers bid at $500-510/t CFR, or $470-485/t FOB, while Egyptian bids were reported at $512-515/t CFR, netting back to $470-475/t FOB. Market participants assessed workable export prices at $470-480/t FOB.

The decline in Turkish imported scrap prices further pressured billet values, with HMS 80:20 scrap easing to $375-380/t CFR Turkiye from around $390-395/t CFR a week earlier, weakening raw material cost support. With buyers maintaining a wait-and-watch approach and seasonal demand expected to remain subdued, Russian billet export prices continued to face downward pressure.

Iranian billet market

Market sentiment in Iran's billet export market improved this week as easing geopolitical tensions and the gradual resumption of shipping through the Strait of Hormuz encouraged producers to return to the export market. Improved logistics supported firmer supplier expectations, lifting export offers modestly.

Most Iranian producers targeted $414-415/t FOB, while workable levels for standard 3SP billet remained at $410-412/t FOB. Higher-grade material continued to command $420-422/t FOB.

Export activity also heard picked up, with market sources reporting 25,000-30,000 t cargoes concluded at $420-425/t FOB, while another 20,000-25,000 t cargo was sold at $415/t FOB. Negotiations for a fresh 25,000-t export tender were also underway, indicating a gradual recovery in Iran's overseas sales.

The return of Iranian billet is already increasing competitive pressure in the Middle East, with offers to Saudi Arabia heard at around $470-475/t CFR. A Southeast Asian trader noted that three to four of Saudi Arabia's five to six major billet consumers are expected to show interest in Iranian material, as buyers reassess sourcing options following the recovery in Iranian exports.

While vessel movements through the Strait of Hormuz have improved, buyers remain cautious due to freight uncertainty, elevated insurance costs, and lingering geopolitical risks. Market participants expect further improvements in shipping conditions to support Iranian exports and intensify competition for regional billet suppliers.