This week has started on a positive note in the Asian billet market with Chinese billet exporters trying to increase billet prices gradually, seeing a rise in futures prices and some positive movements in demand in the local market. Nevertheless, trading in the overseas market has remained quiet, with buyers still resisting the rise in prices.
The SteelOrbis reference price for ex-China billet has settled at $465-475/mt FOB with the midpoint at $470/mt FOB, up by $5/mt compared to late last week. “I think $470/mt FOB is the general FOB price now. It seems it is hard to find $465/mt FOB, for which buyers can negotiate. Many Southeast Asian buyers cannot accept such high prices now. But many have not booked for June-July shipments,” an Asian trader commented, adding that he believes this gradual increase will be accepted at some time. One of the Chinese traders also said that negotiations at $465-470/mt FOB are possible with a firm bid and a decent volume.
The main supportive factors have been increasing futures prices and the improvement in the local Chinese market in general. “Local demand conditions are improved and debar trade has expanded to near 150,000 mt daily… Raw materials are firm as well, especially coke demand is better and the second and third rounds of price hikes have been accepted by major mills,” a Chinese source noted.
The billet offers for June shipment from the major Indonesian mill are at $490/mt FOB today, on April 21, which is slightly down by $5/mt from the level seen late last week. But most market sources do not see this as a trend, but mainly as a correction since “even this level is high for the market”. The producer is still targeting the Middle East market, but no new deals have been reported so far, and buyers in the GCC, who will need to buy for June, may evaluate Chinese billet, which is cheaper.
