Billet export prices from the ASEAN region have been unclear late last and early this week as only one deal has been reported at a slightly higher level, as anticipated by sources, following the rises in Chinese futures prices early last week. But since sentiment has already eased and as there is not much support either coming from China or from the regional buying markets, some ASEAN mills have decided to sell at the previous levels or even with some discounts. In general, the volume of confirmed deals has been higher than reported a week ago.
The official offer price for ex-Indonesia billet has remained stable since late last week at $505/mt FOB, but most market participants agree that the mill is ready for $5/mt discounts and that it is holding its offers stable only in order not to give a signal to the market that the mood has changed to bearish. Late last week, around 10,000-20,000 mt of Indonesian billet were sold at $500/mt FOB, up by $2/mt from the previously reported transactions. However, early this week another 30,000 mt batch from the same mill changed hands at $498/mt FOB, signaling that the market is stable. “The trend seems unclear. Probably traders are doing some back-to-back orders for now,” a major Asian trader said. Some of the mentioned deals done on FOB basis are to cover the previous short position sales by traders.
In addition, at least 30,000 mt of ex-Vietnam billet were sold to a trader at $495/mt FOB late last week. Some market sources said that at the moment the Vietnamese mill does not have July shipment allocation, so in total it has traded 50,000 mt, but the rest of the volume was at a slightly higher level. Initially, the offers from Vietnam were at $500-505/mt FOB, but the mill has decided not to wait longer, seeing not such a positive mood in China. “Now it is difficult for the mill to reach the $500/mt FOB level that had been expected,” another major Asian trader said, adding that he feels prices will soon not have much room to go up or down.
Malaysian mills have still been focusing on sales of slabs and longs mainly as “they don’t want to sell relatively cheap billets,” as a source close to the mills said. The latest tradable level for slabs from Malaysia is assessed at near $515/mt FOB, while the last booking for wire rod was at $525/mt FOB.
The reference price for ex-China billet stands at $500-510/mt FOB, down by $7.5/mt from the level seen for the most of last week. “Steel futures prices have slid this afternoon as the market is feeling mixed signals from soft demand while Shanghai has released a flexible housing policy,” a Chinese source said.
In Southeast Asia’s import billet market, $5/mt higher prices have been confirmed in the latest deals. But this has been mainly due to the previous low level of bids. In particular, a deal for 5 SP Indonesian billets has been done at $525/mt CFR to the Philippines, while another contract for ex-Japan commercial billet has also been heard at $520/mt CFR. Last week, the reference price was assessed at $515-520/mt CFR as buyers were resisting higher offers. Nevertheless, as buying in Asia has been slow for some time already, higher deal price levels have been inevitable, according to market sources.
Offers for sanctioned suppliers like Iran and Russia have been at $510-515/mt CFR in Southeast Asia and Taiwan, with no deal reported so far.