Sentiments in the Southeast Asian billet market have remained mainly negative with the main Indonesian mill cutting offers further, to the levels fixed in the latest deals. This decline has been explained by lower tradable levels in the Asian region, where the latest bookings have been done, compared to other destinations where the Indonesian producer was selling in earlier weeks.
Offers prices for 3SP and 5SP billet from Indonesia have been reported at $500-505/mt FOB on July 4, down from official offers at $510/mt FOB last week, SteelOrbis has learned from the market.
There have been a few deals confirmed to end-users in Southeast Asia since late last week. In particular, a deal for at least 20,000 mt of ex-Indonesia 5SP billet was signed to the leading mill in the Philippines at $520/mt CFR. This price translates to around $500/mt FOB or so. Also, a contract for 10,000-20,000 mt has been done for the local Indonesian market at a similar price but for 3SP billet, which is more popular in the country. “Some bits of demand are there in Asia, but price ideas are low. $515/mt CFR is the number buyers are waiting for,” a Hong Kong-based trader said, adding that the last FOB sales by Dexin Steel were to traders who had previously sold in short positions and needed to cover these positions now.
As a result, the new offers from Indonesia have been mainly in line with the latest deals for Asian end-users. Dexin Steel has also lowered wire rod prices to $525/mt FOB, which translates to around $550/mt CFR. This indicates a decline of $15/mt from the offers at around $540/mt FOB in the second half of June.
Malaysian suppliers are still interested mostly in finished steel sales. But offers to traders, who can buy billet together with wire rods, have been voiced at $510-515/mt FOB for August shipment. For September shipment, the main supplier from Malaysia is going to increase prices again, to $520-525/mt FOB, market sources said.
Ex-China 3SP billet reference prices have been reported at $500-520/mt FOB today, up by $5/mt on average from late last week. Though a number of customers are still able to get material from China at $500/mt FOB, with firm bids, some suppliers have been voicing higher offers due to lower allocations.
A number of customers in Thailand and Indonesia have reported Chinese traders’ offers for ex-China or ex-Iran billet at $518-520/mt CFR, but no deals have been reported so far with some bids at as low as $510/mt CFR.
The average Chinese domestic billet price is at RMB 3,565/mt ex-warehouse, up by RMB 25/mt over the past week. This price translates to $438/mt, excluding 13 percent VAT. The reference price for import billet in China has remained stable from last week at $435-440/mt CFR.
