The major ASEAN mills have announced even higher FOB-based offers as the mood for the future market is bullish. However, trading activity from mills to traders, who were willing to take positions, has slowed down significantly in comparison to the last few weeks. As a result, the gap between the tradable levels for import billets in the Asian region and new FOB prices have widened.
New offers from Indonesia’s Dexin Steel have been announced at $620/mt FOB for the standard 3SP grade from the beginning of this week, up from $600/mt FOB seen late last week. “I believe they can agree at $600/mt FOB for March shipment, just showing how bullish they are,” an international trader said. “For now, bidding has slowed down. Even the previous levels were not accepted. It seems like all are trying to bull the market up,” another large trader commented. The previous deals from Dexin to traders were heard at $580/mt FOB for standard 3SP billet after $565-570/mt FOB reported earlier last week. The mill signed one contract at $590-600/mt FOB to a buyer in the local market but for SAE1008 wire rod grade billet, as SteelOrbis heard.
According to market sources, having a high monthly allocation for sale, Dexin Steel still has March shipment billet and is not in a rush to sell, seeing the previous high activity of sellers.
“I believe that $600/mt FOB can be workable. But only after the holidays, not now,” a trading source said.
Traders are waiting for prices to reach a new high on CFR basis before taking new positions. The targeted tradable destinations for ex-ASEAN billets will be Southeast Asia, Europe and Latin America in the new round, sources believe.
