Prices for ex-ASEAN billets are expected to improve in the Southeast Asian region in the near future amid the cautious optimism prevailing in the Chinese market and ASEAN mills’ export sales to alternative destinations at better prices, SteelOrbis has learned from the market.
Local billet prices in China have increased by RMB 33/mt ($5/mt) today and by RMB 103/mt ($15/mt) over the past week to RMB 3,788/mt ex-warehouse on average or $497/mt, excluding 13 percent VAT. This has led to the tradable import level having reached $490/mt CFR, versus $480-490/mt CFR reported earlier this week, and up by $10/mt from last week.
This price level is still considered too low for suppliers to resume active sales to China, but this is giving hope that the market may move up further. Demand in Southeast Asia has been poor lately, with only some low-priced small deals for discounted ex-Japan EAF billet or traders’ positions at $505-515/mt CFR Manila this week.
But ASEAN mills have not been active in cutting prices anymore and even higher prices for export sales have been heard to alternative destinations. In particular, over the past week, at least two to three cargoes of 30,000 mt minimum each have been traded from ASEAN suppliers (Indonesia and Malaysia) at $530-540/mt FOB to such destinations as Africa and Latin America. As for the African market, the CFR price level has been around $600-640/mt CFR depending on the customer. Also, the freight from the Far East to Latin America has been assessed at around $120/mt and prices have increased slightly from the previous ex-ASEAN trade at about $520/mt FOB, reported as having been done in the middle of this month.
In the Southeast Asian regional market, it is almost impossible to get such export prices and ex-ASEAN mills have had to offer slightly lower levels ($515/mt FOB, which could be negotiated down slightly to $500-505/mt FOB for large volumes). But with the recent developments, it seems that producers may become more confident in an improvement in the regional market too.
