Bullish moods have continued to prevail in the Asian billet market. ASEAN mills have increased their export offers again and at a faster pace than a week ago, seeing more sustainable rises in Chinese futures and spot prices. Though most customers are not ready for such an aggressive mood, the price hike is expected to be at least partially accepted soon.
The major Indonesian billet exporter increased its billet offers for April shipment to $630/mt FOB early this week, up by $20-25/mt from last week’s level of $605-610/mt FOB. “They saw that China’s futures prices went up sharply. There were no sales at $600-610/mt FOB as far as I understand,” a trader commented regarding the reason behind the increase. A few other sources agree that either sales were very limited or they were fully absent over the past two weeks, but at the moment the producer is more confident. “I'm hearing they sold some slabs at higher prices to Turkey, so are increasing billet prices as well,” an Asian trader said. As SteelOrbis reported last week, a contract for ex-Indonesia slabs was rumored at $605/mt FOB as done earlier in the month. But this week, sources have been discussing a sale at $670/mt CFR to Turkey, which is equivalent to around $630/mt FOB, though this could not be confirmed by the time of publication. New offers for slabs from the Indonesian mill have been heard at $640/mt FOB.
In addition, the bullish moods of mills in the ASEAN region have been supported by upcoming restocking by traders as previously booked cargoes have been mostly sold out or only a few of them left. Traders are evaluating the market conditions at the moment. While last week offers to the Philippines were at $605-610/mt CFR from traders, this week market sources are waiting for $630/mt CFR at the lowest or above. The previous deal price level was at $590/mt CFR, but the new acceptable level by buyers would hardly be below $610-620/mt CFR, sources have said.
The Chinese billet market has been rebounding amid improved domestic demand. Offers for ex-China 3SP billet have increased up to $605-610/mt FOB. The SteelOrbis reference price for ex-China billet has settled at $590-605/mt FOB, up by $12.5/mt over the past week, based on the latest tradable levels. “Now prices from China will start to reflect their local prices more, but export allocations will be limited,” a trader said.
The average local billet price in China has reached RMB 4,000/mt ex-warehouse, rising by RMB 47/mt ($7/mt) from the previous day and RMB 145/mt ($21/mt) over the past week. This price translates to $516/mt, excluding 13 percent VAT. As a result, the reference price for imported billet in China has moved up by $10-15/mt over the past week to $515/mt CFR. The imports are not going to revive any time soon, as offers for ex-Iran billet have been reported in Southeast Asia at $595/mt CFR and Russian suppliers are targeting $600/mt CFR and above.
$1 = RMB 6.8557
