Major ASEAN region-based mills have announced a slight increase in offer prices, following the reverse of the sentiments in China. However, even though ex-China prices have increased and futures prices have posted a strong hike today, the sustainability of the trend is questionable, as SteelOrbis has learned from the market.
According to market sources, ex-Indonesia offers are at $605-610/mt FOB today, up by $10/mt from the $595-600/mt FOB levels seen last week. Other ASEAN producers are likely to follow and offer at $600/mt FOB and above.
“The scrap, billet, rebar prices in Southeast Asia will certainly increase starting by the end of this month,” a trader said.
Though these FOB prices from the ASEAN region are still considered too high in the regional market and ex-China prices are still lower, this is a sign of the improved sentiments in the market.
Ex-China 3SP billet offers have increased by $10/mt today to $580-590/mt FOB. As a result, Chinese traders have resumed offering, at $600-610/mt CFR the Philippines and Indonesia, while even early this week offers at $585-590/mt CFR were discussed by traders.
“The improvement in China was the missing link for stabilizing the prices [in ASEAN]. If they stop offering low prices for billet and wire rod, price will improve sharply,” a trader said.
Average local billet prices in China have added RMB 35/mt ($5/mt) today, reaching RMB 3,903/mt ex-warehouse, translating to $504/mt, excluding 13 percent VAT. Rebar futures at Shanghai Futures Exchange have closed at RMB 4,146/mt on February 26, up by two percent from the settled level yesterday. Despite the recent local increase in China, market sources still share a cautious view of future developments.