Ex-China and ex-Indonesia billet prices have reached the same level for the first time in a long period, following months during which Chinese material had been cheaper and Indonesian mills had maintained a premium. This week, however, the downtrend in China has come to a halt amid high production costs and negative margins at some mills, while Indonesian offers have declined as suppliers seek to increase overseas sales volumes.
The reference price for ex-China billet has settled at $460-465/mt FOB, up by $2.5/mt on average from $455-465/mt FOB late last week. While some transactions were under discussion at $455/mt FOB last week, all major suppliers have since withdrawn such levels. The minimum tradable price has risen to $460/mt FOB, while offers are currently at $465/mt FOB or above.
“The market has been supported by stronger commodity prices, but we need to see how sustainable the trend is and to what extent steel prices can actually benefit,” a Chinese source said.
Meanwhile, ex-Indonesia billet offers have declined by $5/mt to $460/mt FOB for September shipment. “I have not heard of any new deals from them, but the price is now the same as that of Chinese material. The Middle Eastern market is weak, and I do not see much demand there, so Indonesian suppliers will have to compete for sales in other markets, including Southeast Asia,” a Singapore-based source stated.
At the same time, in the Southeast Asian import market, offers from both Chinese and Indonesian mills, corresponding to approximately $480-485/mt CFR, have been considered too high, with buyers targeting levels of $470-475/mt CFR.
