Billet quotations in the Persian Gulf countries rose by $34/t, offsetting the September decline. In October, regional billet markets saw mixed price trends: in China and Turkey, quotations fell by $10–13/t by the end of the month, while in the Persian Gulf countries they rose by $34/t, GMK Center writes.

General market situation

In October, the global square billet market continued the stagnation that began in September. At the beginning of the month, prices declined amid weak demand and weakening support from production costs.

By mid-October, trading activity in key markets increased, but prices changed insignificantly. However, in the second decade of the month, negative sentiment prevailed not only in Asia but also in MENA countries.

At the end of October, prices stabilized despite the rise in scrap metal costs in Turkey and the continued weakness of the Chinese market.

Turkey and the Black Sea region

In October, pessimism prevailed in the Turkish market and among Russian exporters. Russian suppliers are under serious pressure due to rising freight costs and high risk premiums, as well as buyers' reluctance to accept the offered prices. In Turkey, amid falling rebar prices and a shortage of reliable import supplies, producers are forced to buy expensive local raw materials or switch to Chinese material with favorable financing terms.

The main market trends in October include:

The crisis and reorientation of Russian logistics. Supplies from Black Sea ports have virtually ceased; exporters are shifting volumes to Baltic ports (St. Petersburg, Ust-Luga), which leads to higher freight costs ($63–78/t to Izmir), increased risk of delays and growing fears of drone attacks.

Import shortage in Turkey. Systematic disruptions of shipment deadlines from the Russian Federation and the requirement for Turkish plants to use at least 25% local raw materials for export products stimulate domestic demand.

Expansion of China and "grey" imports. Chinese plants benefit by offering payment deferrals of up to one year (at 5.5–6% per annum). Supplies of billet allegedly from Oman, Pakistan and Azerbaijan (likely of Iranian origin) are also growing.

Billet imports to Turkey are shrinking due to the cessation of Russian supplies. According to the Turkish Statistical Institute (TUIK), in September they fell by 17% y/y — to 286 thousand tonnes. China (142 thousand tonnes; +29% y/y), Malaysia (53 thousand tonnes; –2% y/y) and Vietnam (50 thousand tonnes) dominated the import structure. Domestic production over nine months amounted to 17.8 million tonnes.

In the domestic market, the Kardemir plant raised prices to $565–575/t EXW; other local producers offer billet at prices above $570/t EXW. At the same time, Russian billet was offered at $540–550/t CFR, but buyers' counteroffers did not exceed $515/t CFR. The average price of square billet on Turkey Ex-Works terms in October decreased by $13 — to $563/t.

Persistent shipment problems from the Russian Federation will maintain the local shortage in Turkey and the high prices of domestic producers (Kardemir). Further billet imports are possible from China and Iran (through third countries).

ASEAN countries

Business sentiment in the billet markets of ASEAN countries in October was mostly negative. Buyers were passive, and price standoffs persisted in the markets. Importers postponed purchases or demanded significant discounts, while rolling mills reduced imports. Trading activity was supported mainly by traders closing short positions and hedging risks.

The main trends include:

Widespread price declines and weakening demand in ASEAN countries and China.

Increased billet imports by Vietnam from ASEAN countries (Thailand, Indonesia) thanks to zero import duties and price competitiveness.

The return of Russian suppliers to the region's markets (Philippines, Taiwan).

The key factors affecting the market include:

Negative factors. Falling rebar futures on the Shanghai Exchange; rising freight rates ($2–3/t from China); low demand from end buyers.

Supporting factors. Rising raw material costs: higher scrap prices (HMS and Japanese H2, which rose in price due to the yen's strengthening) increased smelting costs; high prices for coking coal and coke prevent producers from cutting prices further due to unprofitable production.

Logistics and production. Early resumption of production at the Dexin plant after the drought.

Price dynamics:

China (FOB). The price of 3SP billet (150 mm) fell from $465–473/t to approximately $455–460/t (North and East China).

Philippines (CFR Manila). The price of 5SP/Q275 billet fell from $492–495/t to $487–488/t.

Indonesia (CFR Jakarta). Prices for 5SP billet were $483–487/t, for 3SP — about $478/t; Dexin's export price (FOB) fell from $475/t to $470/t.

Vietnam (CFR). Imports from Thailand and Indonesia were recorded at $490/t (with domestic prices in Vietnam at $510–520/t CPT).

Russian suppliers concluded deals in the region at $491–497/t CFR.

Market participants expect further pressure on prices due to low counteroffers from foreign buyers ($450–455/t FOB China, $485/t CFR Philippines). Vietnamese buyers are not ready to overpay for fast deliveries, and the market maintains a wait-and-see position.

China

In China's domestic market (Tangshan), pessimistic sentiment and a wait-and-see position prevailed in October. Buyers and traders avoid buying the dip due to the lack of end demand, while state-owned enterprises are cutting purchases to reduce debt by the end of the year. According to Kallanish, average square billet prices in Tangshan in October fell by $10 — to $434/t.

The main trends include:

A continued decline in spot prices and falling rebar futures, which are approaching the psychological mark of 3,000 yuan/t.

Growing losses of rolling mills (up to 30–40 yuan/t), leading to production stoppages and reduced raw material purchases.

Steelmakers' reorientation toward increasing billet sales due to weak