Official offers for ex-ASEAN and ex-China billet have increased early this week, but the rise has been more nominal and reflects the improvement in futures prices in China, while the market has been on a holiday lull.
Ex-Indonesia 3SP billet offers have increased to $490/mt FOB, versus $480-485/mt FOB last week. However, market sources believe that the recent offers are nominal as “Indonesia is on holiday, as are hubs in Hong Kong and Singapore,” a leading trader said, adding that there have been no deals done at higher levels so far. On Monday and Tuesday, there was the Lebaran holiday in Indonesia, and on Tuesday and Wednesday the Philippine market was on holiday too, while Singapore also has a holiday today for Hari Raya Puasa. The latest deals for ex-Indonesia 3SP billet were done at $475-480/mt FOB last week, according to market sources, slightly below the $480/mt FOB level reported in contracts previously.
“It is true that Dexin is at $490/mt FOB. They follow China, which is working,” a Chinese trader said. The reference price for ex-China 3SP billet is at $490-500/mt FOB, up by $12.5/mt since late last week. This has been due to rises in futures and iron ore prices as construction steel demand has improved slightly and overall expectations for steel consumption have been a bit better.
Higher FOB levels have failed to be reflected in Southeast Asia’s import market so far. Some traders' offers for the Philippines and Thailand have been heard at $495-505/mt CFR. Though market sources are not excluding offers will go up to $510/mt CFR and above, if the rebound in China continues. “There is no market now [due to holidays]. I am waiting for China next week. Then we can decide if there is rebound,” a Manila-based source said. The reference billet price has increased to $500-510/mt CFR Southeast Asia, up by $5/mt on average over the past week.