Asia billet-scrap spread hits record high on freight issues, China demand

Bulk freight problems and strong billet demand from China have led to a sharp rise in the steel billet-scrap spread in recent weeks, Fastmarkets pricing data shows.

The premium that Fastmarkets' assessment price for steel billet, import, cfr Southeast Asia carries over the assessment for steel scrap, HMS 1&2 (80:20), cfr Vietnam rose to $165 per tonne on Friday March 19 - the highest level recorded since October 2018.
The billet-scrap premium, which indicates the profit margins for Vietnamese steelmaker importing scrap in bulk and exporting billet to Southeast Asia, has averaged $142 per tonne since the Vietnamese price started being published in August 2018.
Although oversupply in key regions such as the Japanese export and Turkish import markets is constraining scrap prices, healthy demand from China is keeping Asian steel billet prices elevated, sources said.

"The Japanese domestic scrap price is weak, mills in Taiwan dropped their bid prices and there's no demand in South Korea so Japanese...

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