The Asian billet market seems to have hit the bottom for now and most sellers hope for a rebound in the near future, considering some better sentiments in China and sizable sales of billets from Indonesia this week.
Deals for 130,000 mt of ex-Indonesia billet have this week been signed to traders at $424-425/mt FOB for June shipment, $1-2/mt below the offer level seen late last week. Subsequently, the mill increased offers to $427/mt FOB. At the moment, the Indonesian mill has only small volumes for June shipment still available for sales. “Most volumes were for covering short positions of traders because futures [in China] were up yesterday, and the yuan strengthened,” a Singapore-based source said. The easing of US-China tensions led to a 1.46 percent increase in rebar futures yesterday and today the market is rather stable. Most positions of traders taken from the Indonesian mill this week will be for covering previous sales to the MENA region - Saudia Arabia or UAE - and to Turkey.
Trading for Asian billet has been mainly concentrated from steel mills to traders, while overall sales from traders or mills to end-users have been limited. In particular, after scrap in Turkey broke the $330/mt CFR mark, demand for import billet has been lower, while the tradable level for Asian origin billets, except for Malaysia, has remained at $455-460/mt CFR.
The ex-China billet reference price has remained stable at $420-430/mt FOB. This week, some small-volume deals for Chinese 3SP billet have been done at $435-440/mt CFR Taiwan, which may translate to around $415-420/mt FOB. Market sources said that Chinese traders have been less aggressive lately due the expected improvement of local demand ahead of the May holidays.
In Southeast Asia’s import billet market, offers for 5SP billet have been heard at $452-460/mt CFR Manila with the lower end ($452-455/mt CFR) corresponding to 150 mm material, while the higher end is for the more popular 130 mm billets. But higher prices have failed to attract demand after a deal signed for ex-China 5SP 150 mm billet at $440/mt CFR around 10 days ago.
Also, while earlier this week some offers from traders for ex-China 5 SP billets were heard at $440/mt CFR, now most offers are at $445-450/mt CFR.
The SteelOrbis reference price for import billet in Southeast Asia has increased by $6/mt to $440-452/mt CFR with the midpoint at $446/mt CFR.