The Gulf Cooperation Council market is experiencing a merchant billet shortage due to production suspensions and full orderbooks at various mills, Kallanish notes.

A Bahraini producer is carrying out annual scheduled maintenance, expected to end in mid-February. One Omani mill has suspended its operations, while another is booked until the end of February. There is consequently a billet supply shortfall in United Arab Emirates, Oman, Bahrain and Saudi Arabia.

In Saudi Arabia, domestic induction furnace billet has increased by nearly SAR 50/tonne to SAR 2,380-2,450/t ($634-653) ex-works, in line with increased CIS-origin billet tags and hiked local scrap prices. The latter, for HMS 80:20, is at SAR 1,800-1,850/t in the eastern part of the country.

"There is a billet shortage and some re-rollers are working with a 25% utilisation rate," comments a senior regional mill official.

Imported commercial-grade billet from the Black Sea is pegged at $675-685/t cfr Dammam for February shipment. This material was offered at $650-660/t cfr Dammam last week.

Re-rollers are hesitant to book as they are stifled between billet cost and rebar sales price. Hadeed rolled over rebar prices on Thursday amid a shortage of rebar in the country, with traders negotiating to import material, sources observe.

In UAE, buyers are resisting against price increases and pushing hard to book regional electric arc furnace billet at $650/t cpt UAE for February shipment, but material availability is low. Indian billet price offers are at $680-690/t cfr UAE for February deliveries.

"Rebar transaction prices at AED 2,430-2,445 [$661-665] are prevailing at almost the same level as billet prices,” opines a senior mill official. “They [re-rollers] probably did not foresee a drastic increase in billet prices. Current rebar prices are a loss for re-rollers.”

A UAE re-roller is heard to have booked high-manganese billet from India at $625/t cfr UAE for 5,000-10,000 tonnes for end-February shipment. However, Indian commercial-grade billet prices have over the last two weeks not dropped below $595/t fob India.

In Iran this week, billet prices have increased by nearly $15/t and commercial-grade billet through the EAF and blast furnace route is at $570/t fob Iran, with induction furnace billet at $555/t fob. However, electricity and gas supply curtailment pose questions over whether Iranian mills can even ship pre-ordered billet export quantities.