Ex-ASEAN billet suppliers have enlarged billet export sales recently after weeks of slow trading as competition with Chinese sellers have eased. Chinese billet prices have increased early this week, coming to the same levels with ex-Indonesian prices or even higher.
As a result, the Indonesian mill has managed to sell as much as 120,000 mt of billet since Friday. Most sales were at $440-445/mt FOB, in line with the offer level from the mill last week. However, early this week some sources have already seen offers at $450/mt FOB. “They got some more volume to release after which they probably will increase price,” a Singapore-based trader said. Most volumes sold have been heard for traders, covering short positions, according to sources. After the recent trades, it seems that most of October shipment allocation of the Indonesian mill has been sold out.
Over the past few weeks Chinese billet offers were below that from Indonesia by $10/mt or more, so buyers focused on ex-China purchases, leaving ASEAN mills with poor order books.
But since Monday this week, ex-China reference price has been at $440-455/mt FOB with the midpoint at $447.5/mt FOB. Offers are rare and at the higher end of the range. “It is hard to find good offer from China now. They [prices] should be at $440/mt FOB, but in reality, mills are out of the market,” a Chinese source said. Moods in the Chinese market have improved more this week mainly on expectations of demand improvement in September and as a reaction to Chinese government halting steel capacity replacement program as of August 23. Moreover, most mills have already been seeing losses for some time, so a price rebound has been expected. Steel and raw material futures prices have been rising for two days in a row.
In SE Asian import billet market, offers for ex-Asia 5SP billet have reached $475/mt CFR, while a week ago a deal for undisclosed origin was signed at $465/mt CFR or slightly lower. Also, last week, a contract for 3SP billet was rumored to Indonesia at $450/mt CFR, but “this price is impossible for now, traders will not find material,” a Chinese source said.