Billet offer prices from mills in the ASEAN region have declined early this week, as the market was not ready for the hikes announced last week and there has been no support from the Chinese market. New deals have been signed at stable levels, proving that the market has rejected the attempts at price increases.
The ex-Indonesia billet offer has been lowered by $10/mt over the past week to $510/mt FOB. A number of market sources agree that the previous official offers were “unreasonable”, based on expectations and news regarding the non-VAT trade inspections in China. Accordingly, the decline is a correction to a more realistic market level. At least one deal for up to 30,000 mt of Indonesian billet for June shipment was done at $500/mt FOB early this week, stable from the previous booking reported last week. Market sources do not agree on the market to which the material will go, as it was booked by an international trader. One trader believes that it will go to Asia, as trading has been on pause for quite a while now. However, market sources believe that traders may look more closely at the MENA region in the coming weeks. So, trying to take long positions at the moment. Malaysian suppliers have been holding back official offers, still focusing on long product sales. However, market sources believe that $500-510/mt FOB can be achieved for Malaysian billet, especially if shipped with finished steel products.
Ex-China 3 SP reference prices have been stable at $500-510/mt FOB, but they are still mainly indicative as traders and small mills have been choosing to sell locally if prices in the domestic and export markets are the same. “The market needs China’s billet price only as an indication. If you calculate the export price from the local price, it cannot be called an official offer level,” a Chinese source said. The latest softening in futures prices and the pre-holiday mood in China have also impacted the Asian billet market, which is not expected to improve in the near future.
At the same time, in Southeast Asia’s import billet market, the reference price has changed only slightly from $510-520/mt CFR to $515-525/mt CFR. A deal for 5SP billet has been rumored at $520/mt CFR Manila for Asian origin, but it could not be confirmed by the time of publication. A few traders said that this was the level already available in the market for 10 days, but buyers were bidding at $510/mt CFR last week. New offers for 5SP billet for ex-ASEAN and ex-China origins have been at $525-540/mt CFR to the Philippines.
A billet offer from Russia’s Far East region has been heard at $512/mt CFR Taiwan, more or less in line with that reported late last week, while bids have been below $510/mt CFR.
