The leading Indonesian mill hiked its billet offers by $10/mt yesterday, September 19, market sources have confirmed, following deals signed at the previously targeted levels a few days back and seeing strong raw material prices and slight local steel price increases in China.
The new ex-Indonesia offer level is at $510/mt FOB for 3SP and $515/mt FOB for 5SP billet, versus the previous $500-505/mt FOB. “I still do not believe in this price. The real market is far from there,” an Asian trader said.
One of the main reasons for the price increase has been improved trading. According to market sources, up to 60,000-65,000 mt have been sold by Dexin Steel to traders with the majority of this tonnage changing hands at $502/mt FOB, while the latest small volume was traded at $506/mt FOB. “Some Chinese traders have short positions. Now I know one trader whose latest date of shipment is coming closer and they are trying to cover it,” a Singapore-based source said. However, there has been no confirmation that all these recent sales to traders have been for the covering of short positions. Some market sources believe some may hold material for future sales. “The market is surprising this week. We see traders’ 5SP at $519/mt CFR [Manila] for open origin, and in the same week Dexin is officially at $515/mt FOB and Malaysia is at $510/mt FOB,” a Manila-based trader said.
Ex-Malaysia offers have been confirmed at $510/mt FOB for both 3SP and 5SP, slightly below Dexin’s offers, as “not many deals for billets have been heard recently,” another trader said.
Ex-China 3SP billet tradable levels are at $500-510/mt FOB after increasing by $5/mt early this week. Average local billet prices in China have been stable from yesterday at RMB 3,590/mt ex-warehouse, which is RMB 27/mt ($4/mt) higher week on week. “The raw material prices are still high, so mills are stuck between high costs and not the best demand in autumn,” a Chinese trader commented.
$1 = RMB 7.1894