Billet suppliers have started to increase offers in the Southeast Asian market, following a few deals signed at lower levels last week. The major reason is the upturn of scrap prices, which has also started in Asia recently.
Offers prices from major suppliers have been heard at $425-430/mt CFR in all major countries in Southeast Asia. There are still some small tonnages of position cargoes offered at a lower level, in particular for ex-Vietnam billet at $420/mt CFR Indonesia. However, “there are very few such offers,” a Manila-based trader said. “It certainly sounds like the market is back up to $425/mt CFR and above,” another trader said.
Offers of the Indonesian newcomer Dexin Steel, which will launch its blast furnace this week, have been heard at $425/mt CFR Manila. Billet from Russia’s Far East ports has been available at $430/mt CFR and above. One re-roller said that offers for ex-South Korea EAF billet have been at $425/mt CFR Manila, while some other sources mentioned that it is hard to find any offers below $430/mt CFR. For instance, a trader received an offer of ex-South Korea billet at $433/mt CFR.
The lowest offers that have been heard this week have been for ex-Vietnam induction billet at $410-415/mt CFR and ex-China billet at $415-420/mt CFR, both to the Philippines. But this is not the market level any more, sources have said.
Late last week, there was a sale of 6,000 mt of ex-Japan billet at $415/mt CFR Manila. Moreover, some tonnage has been sold from Russia to Taiwan at $410/mt CFR. “We are targeting $415/mt CFR,” a customer from Bangkok told SteelOrbis, adding that it is hard to find such a price now. The latest deal for ex-Iran billet has been at $418/mt CFR Thailand.
Most customers have been not ready to accept a price increase so far and there have been no reports of deals at higher levels. But taking into account rising scrap quotes, an increase in prices is expected in the near future. Ex-Japan H2 scrap prices have nominally increased by JPY 500-1,000/mt ($4.5-9/mt) from the previous offers to JPY 23,500-24,000/mt ($210-214.5/mt) FOB.
