GCC billet producers see resistance to prices
Gulf Cooperation Council billet producers are seeing resistance to quotes from re-rollers due to the price level of rebar in their domestic markets.
Although rebar re-rollers are compelled to buy billet to continue production, they have lowered their billet procurement tonnages. This is putting pressure on billet producers and consequently billet prices are expected to soften, various sources confirm to Kallanish.
This week in United Arab Emirates, there is a wide range of billet quotes for domestic and imported material. Locally-produced induction furnace commercial billet from a medium-capacity mill is pegging at $830/tonne and from a smaller-capacity mill at $780/t, both ex-works.
Imported induction furnace 3-4sp grade billet from Saudi Arabia is offered at $820-836/t cpt UAE and electric arc furnace billet from Iran is available at $770-790/t delivered to customer's warehouse. On the other hand, Indian EAF billet is available at $835-840/t cfr UAE, whereas Omani wire rod grade EAF billet is heard offered at $853-858/t cpt UAE, for April shipments.
"In the UAE domestic market rebar sales prices are at $837-847/t ex-mill for April deliveries. Rebar re-rollers are seeking billet at lower than $800/t cpt, which is quite understandable. However, we are not ready to reduce our prices to that level,” explains a senior Oman mill official.
In Saudi Arabia, induction furnace 130-150mm 3-4sp billet offers inched up to SAR 3,000-3,125/t ($800-833) ex-works, both for domestic and GCC markets. This week, special grade, higher-manganese content billet has been sold at SAR 3,150/t ($840) ex-mill. Indian-origin 150mm 5sp grade billet is meanwhile heard offered at $850/t cfr King Abdullah Port for end-May shipment.
"Jordanian buyers’ appetite has diminished for Saudi billet due to the rebar price ceiling decree implemented last week in Jordan,” explains a senior merchant billet producer official. “Saudi rebar re-rollers find current prices not justifiable since it leaves a low margin after conversion [billet to rebar] cost. However, there is undeniably a good momentum for rebar in the country, which translates into strong buying appetite.”
GCC long steelmakers are seeking alternative export markets, such as North Africa for billet, and Yemen, Israel and Europe for rebar sales.
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Anonymous
Very good overview of the weekly steel market.
Anonymous