ASEAN-based mills have started to see much higher interest in purchases of billet from traders after their offers increased last Friday and since the rebounding trend in China is still continuing, according to SteelOrbis’ information on June 6.
In total, around 60,000-70,000 mt of ex-Indonesia billet have lately been traded at $507-510/mt FOB to at least three international traders. This means that the official increase in offers, from $490/mt FOB to $510/mt FOB announced on Friday, has been almost fully accepted by traders, who are in need to take July shipment positions.
At the same time, there has been no information about new sales from Malaysia and at least one mill is heard to have withdrawn offers, expecting a further increase and focusing on pushing up wire rod sales first. The last offers for ex-Malaysia BF billet were at $515-520/mt FOB, up from traders’ previous offers at around $500-510/mt FOB last week. Export wire rod offers from Malaysia have been voiced at $550-560/mt FOB at the lowest, up from ex-ASEAN quotations at $530-540/mt FOB a week ago. “The major Malaysian mill stopped quoting prices for billet on Monday. They expect sales at higher prices,” a trader said.
Ex-China billet prices have reached $510-520/mt FOB, up by $10/mt since late last week. Recent production cuts in China, the improvement in futures prices and the expected support for the real estate sector from the government have provided support for billet prices in China, though overall demand has not been high in the local market.
The average billet price in China has increased to RMB 3,475/mt ex-warehouse on June 6, up by RMB 115/mt ($16/mt) over the past week. This price translates to $433/mt, excluding 13 percent VAT. So, the reference price for imported billet in China has increased to $430-435/mt CFR, up by $10/mt over the past week, but is still very low for import trading to resume.
$1 = RMB 7.1075