ASEAN mills have decided to finish the year on a positive note, increasing its billet and slabs offers. The major reason behind this decision has been stronger sentiments in China and high raw material prices, while deals have been limited or absent at all.
Ex-Indonesia 3SP billet offers have added $5-10/mt over the week, reaching $530-535/mt FOB again. The latest single deal has been reported at $525/mt FOB with a few market sources believing that it is for the Latin America market. “No one else will accept this, so that $535/mt FOB offer is just indication now, not the real market level,” a Singapore-based trader said. A few other sources said that in the majority of sales destinations, including Asia and Turkey, the tradable level is not above $510-515/mt FOB so far. “Dexin offer is now near $530/mt FOB as there are no incentives for them to lower prices today given Chinese futures,” another trader said. Offers for Malaysian billet have remained limited.
The billet reference price for SE Asia has remained at $530-538/mt CFR, stable after an increase last week, but no deals have been reported with demand assessed as “dead”. Last deals were done at $530/mt CFR for 5SP. Offers for ex-Russia commercial billet in Taiwan have remained at $530/mt CFR, after an increase of $5-10/mt reported last week.
At the same time, ex-Indonesia official slab offers have been reported at $620/mt FOB, up sharply from the previous level of $580/mt FOB. “This is true, prices are that high, they hope to get it after Europe comes back from holidays,” a trader said. Ex-Malaysia slab offers have been assessed at not below $600/mt FOB.
Ex-China billet price has gained $10/mt on average since late last week to $520-550/mt FOB with the midpoint $535/mt FOB. The average Chinese billet price in the local market has been at RMB 3,730/mt ex-warehouse on December 26, up by RMB 42/mt ($6/mt) over the week.
Today rebar futures at Shanghai Futures Exchange have added 0.65 percent. Steel prices in China have been pushed up by high raw material prices with iron ore exceeding $140/mt CFR.
$1 = RMB 7.0965
