Steel Billet Market Analysis

Steel Billet Market Analysis – November 2024

  1. Regional Market Dynamics of Steel Billets
  • China: In China, steel billet prices in the Northern region remain stable at around 3,160 yuan per ton, even as demand sees a dip. Major disruptions from recent severe weather in Eastern China have led to delays in construction activities, impacting logistics for construction materials like rebar. Despite the weather challenges, billet prices have stayed level as sellers resist reducing prices, betting that demand will pick up when conditions improve.
  • Europe: European steel markets continue to face headwinds, with Northern Europe seeing slow trading and a generally pessimistic outlook. In Southern Europe, demand is stagnant as market participants expect only minor price fluctuations. In its latest forecast, the European steel association Eurofer adjusted its outlook for 2024, now predicting a 1.8% decline in steel consumption. The revision reflects pressures from economic factors, including high energy costs, increased inflation, and persistent geopolitical uncertainties.
  • Turkey: In Turkey, billet demand remains sluggish, and local steel producers are responding by adjusting their export prices. Rebar export prices currently hover around $590-600 per ton FOB, but buyer interest is minimal as domestic and export demand stay soft. Turkish steelmakers expect limited movement in prices as regional buyers remain cautious in the weak economic environment.
  • United States: The US market faces mixed dynamics, with steel mills attempting to lift prices to offset rising raw material costs, especially scrap. Despite these adjustments, demand is constrained in the hot-rolled coil and rebar segments, and buyers have shown limited interest in the price hikes. Mills’ efforts to counteract cost increases are likely to face continued resistance without a clear uptick in demand.
  1. Asian Scrap Price Decline and Market Influence

   – Asian scrap prices reached their lowest level in nearly four years in September 2024, impacted by subdued demand and a highly competitive market environment. Japanese sellers have reduced offers, leading to softer prices across the region. The Platts containerized HMS 1/2 80:20 CFR Taiwan index saw a steep drop, going from $320 per metric ton in late August to $308 per metric ton by the end of September, mirroring similar reductions in seaborne billet import prices, according to data from S&P Global Commodity Insights. This significant decline highlights ongoing challenges for scrap and billet markets in Asia, as competition and shifting supply patterns keep prices under pressure.

  1. Iran’s Billet Market Attracts Regional Investors
  • The Iranian steel market is navigating unique conditions amid fluctuating dollar rates driven by heightened political tensions and risks of conflict. These economic pressures have led to highly competitive billet pricing, estimated at around $420-430 per ton (EXW), which has attracted considerable interest from neighboring countries. Despite the volatility, the favorable pricing has boosted demand from regional investors looking to capitalize on the current market conditions.
  1. Outlook for Steel Billet Prices
  • The billet market’s near-term prospects appear subdued, with modest demand expected across major regions. Europe and Turkey may see stable but low-demand conditions heading into early 2025, limiting potential price increases. However, in China, factors such as inventory adjustments and potential stimulus measures could support billet prices marginally if economic indicators improve. Market participants are likely to keep a close eye on developments in Asia, as scrap and billet prices continue to shift in response to market pressures.

 

Conclusion

Across key markets, the steel billet sector remains in a cautious position. Economic uncertainty and regional complexities weigh on the market, keeping prices under restraint. Nevertheless, markets like Iran present unique opportunities, while regions such as China may benefit from possible government interventions aimed at stabilizing demand. The outlook for early 2025 suggests a steady if slow, recovery contingent on economic improvements and a favorable shift in demand.