Activity in the Asian export billet market has been slow this week as most buyers assess prices as being too high. Even though the Indonesian mill has started to offer for April shipment, this does not reflect strong market conditions, according to sources, as material for March shipment can still be available in negotiations.
The ex-China billet reference price has remained stable at $430-435/mt FOB with most offers at the higher end of the range or up to $440/mt FOB for end of February-March shipment. Traders are not ready to take positions, and bids are assessed at not above $430/mt FOB. Recent production cuts and stable to slightly higher local prices in China have meant that Chinese mills are not very interested in exporting billets.
The billet segment has not been affected much by the news about the new export licensing policy in China since “it has been set to fight non-VAT trade”, as one large exporter said, while in billet trading non-VAT offers are rare. However, big traders and mills, who have big orders for January shipment, are now focused on getting the licenses rather than on signing new contracts. “The export market is stable, and sellers have started to apply for export licenses. The process is slow, so mills try to maximize speed to get them,” a Chinese trader noted.
Some bids for Chinese billets have been heard in the GCC at $470/mt CFR at the highest, but no new deals have been confirmed with the lowest offers being at $472-475/mt CFR. In Turkey, demand for Asian material has been very limited with only one big buyer still in the market, but the buyer’s price idea is $5-10/mt below this week’s offers at $470-475/mt CFR.
In Southeast Asia’s import billet market, offers for Asian 5SP billet have been mainly at $455-460/mt CFR, with no negotiations heard. As for 3SP, buyers in Thailand are not ready to bid above $440/mt CFR, which seen in the previous contracts for Iranian material.
An offer from the Indonesian mill stands at $440/mt FOB for April shipment, up by $3/mt from last week. However, an Asian trader commented, “I don’t think they are really sold out for March. All markets are slow,” adding that this could just be a sign that the seller is not active at the moment and is waiting for better sentiments in the market.
There has been no active offering of billet from Malaysia or Vietnam over the past week.