Demand for ex-ASEAN billets has increased significantly this week as, with the recently announced price increases, traders have become more active in purchases. In total, at least 80,000 mt of ex-ASEAN billet have already been sold this week and traders will target mainly Africa and Turkey with these tonnages. Also, sales of an additional 30,000-40,000 mt are under negotiations.
The recent deal prices for ex-Indonesia billet have been at $507-510/mt FOB for July shipment, as SteelOrbis reported earlier, with around 60,000-70,000 mt confirmed as sold, which indicates a rise from the previous transactions at $490-495/mt FOB for June shipment. Most of these tonnages are expected to be sold by traders to North Africa, Egypt and Morocco in particular. At least one deal for 20,000 mt of this volume has been widely discussed as having been done to a trader who is targeting Egypt, but the CFR price has not been confirmed by the time of publication, with the levels of $530-540/mt CFR rumored in the market assessed by a number of market sources as too low. Also, one more deal has been heard at an even lower level, at $520/mt CFR Egypt, but this was either loss-making for the trader, who sold in a short position earlier, or does not refer to ex-Indonesia billet, according to the market. “Selling to Egypt nowadays means a 100 percent risky payment procedure, so what is the point accepting the low price and actually doing that when you can sell higher to Turkey,” a trader commented. The lowest offers from Russia or Donbass for Egypt have been reported at $550-555/mt CFR this week.
Also, there are still negotiations for 30,000-40,000 mt of ex-Indonesia billet to India at $510/mt FOB, but no deals have been reported so far, with this destination rarely suitable for any significant import volumes apart from some specific grades.
In addition, 20,000 mt of ex-Malaysia billet have changed hands at $515/mt FOB or slightly above recently, up from the sale by the same producer done in the previous round of bookings at $500-505/mt FOB. This volume is expected to go to the Turkish market with the CFR price assessed at around $560/mt CFR or slightly higher, considering the freight and trader’s margin. “Malaysia is duty-free, so mills [in Turkey] may keep buying it,” a market source said. Previously, three deals for ex-Malaysia billet were discussed as having been done to Turkey at $540-545/mt CFR for June-early July shipment mostly.