Weekly round-up: Billet prices firm up on rising costs amid geopolitical tensions; demand remains cautious

• Black Sea billet up, but buyers resist higher CFR levels
  
  
• GCC prices rise sharply on energy, logistics disruptions
  
  

Global billet markets continued to reflect a cost-driven uptrend, as escalating geopolitical tensions around the Middle East, particularly the Strait of Hormuz, pushed up energy, freight, and raw material costs. Brent crude surged to around $106/bbl (vs $90/bbl w-o-w), while iron ore prices strengthened to $109-110/t CFR China, supporting higher steelmaking costs globally.

Despite this, demand remained subdued, with buyers largely adopting a wait-and-watch approach and limiting purchases to essential volumes.

In Turkiye, the scrap market remained inactive but firm, with HMS (80:20) prices steady at $405-406/t CFR. Mills shifted focus toward domestic scrap procurement, raising local purchase prices to secure cheaper feedstock amid margin pressure and weak long steel demand. "Suppliers are holding firm on prices, while mills are resisting due to weak downstream demand, resulting in limited trade activity," a trader noted.

However, market participants expect import demand to return, as domestic scrap and billet availability remain insufficient to meet mill requirements.

CIS/Black Sea billet market

In the Black Sea region, billet prices showed a firm upward bias, with Russian-origin material heard at $475-480/t FOB Russia, although buyers remained below $495/t CFR Turkiye, limiting deal activity.

Turkish domestic billet prices rose to $555-560/t exw from $540-540/t exw, supported by higher scrap costs. Import billet offers into Turkiye were heard at $500-535/t CFR, up slightly w-o-w.

A key development during the week was Kardemir's billet sales, where prices were reduced slightly to $530-540/t and $550/t exw, resulting in strong buying response with sales estimated between 40,000-55,000 t.

"Lower prices from Kardemir attracted buyers, especially profil producers, as import options remain relatively expensive," a Turkish buyer source noted.

In the finished steel segment, Turkish rebar prices increased to $600-625/t exw, while wire rod rose to $610-630/t exw. Export offers were heard at similar levels ($605-615/t FOB rebar), though demand from Europe remained weak due to quota exhaustion and cautious buying.

Asian billet market

Asian billet markets displayed mixed dynamics, with cost support offset by weak downstream demand. Chinese billet export offers were stable at $470-475/t FOB, supported by firm domestic demand and reduced supply from Iran due to geopolitical disruptions. Domestic strength and improved order books also supported pricing.

In Southeast Asia, billet offers ranged at $495-505/t CFR, with some offers reaching $505-510/t CFR, while buyers remained at $480-485/t CFR, reflecting a significant bid-offer gap.

In Indonesia, major steel mill offered billet at $485/t FOB, down by $4-5/t, with a deal for 30,000-35,000 t concluded at the same level for July shipment to Oman. However, Indonesian domestic billet offers at $505-508/t CFR struggled to compete with Chinese material at $492-495/t CFR.

"Long steel demand remains weak, and buyers are not willing to accept higher prices despite rising costs," an Indonesian market participant stated.

In Thailand, Chinese billet dominated supply due to the absence of Iranian material, with offers heard at $485-495/t CFR, occasionally reaching $500/t CFR. However, buying remained limited.

In the Philippines, billet offers at $500-505/t CFR saw minimal interest, as buyers avoided bookings ahead of the rainy season, reflecting seasonal demand slowdown. Rebar offers in Southeast Asia were heard at $510-520/t CFR, up from $500-505/t CFR, although buyers remained comfortable at $500-502/t CFR, indicating resistance to higher levels.

GCC steel market

The GCC steel markets experienced strong upward pressure, driven by rising energy costs and logistical disruptions linked to the Strait of Hormuz.

Billet offers in the region increased to $530-545/t CFR, compared with $515-535/t CFR previously. Supply concerns and higher input costs forced mills to raise prices despite weak demand conditions. In Saudi Arabia, the benchmark producer Hadeed increased rebar prices by SAR 160/t ($42/t) to around $746/t CPT, marking the fourth price hike in April. Cumulative increases reached over $100/t, reflecting persistent cost pressures.

"Price increases are largely cost-driven, as demand remains relatively subdued," a regional trader commented. Rebar prices across MENA import markets were heard at $570-590/t CFR, supported by rising billet and scrap costs.

In the UAE, however, the market showed relative stability, with the benchmark producer maintaining rebar prices at $741/t exw, aiming to support construction activity amid challenging conditions.