The mood in the Asian billet market has been supported by the recent gains in the local Chinese market. However, ASEAN region-based mills have been targeting only limited price increases for now, trying not to scare buyers off.
Ex-Indonesia 3SP billet offers have been announced at $500/mt FOB, up from the previous deals done at $490-494/mt FOB for 5SP and one for 5SP reported at $498/mt FOB last week. “These days China's prices are on the rise, considering futures have increased too. I guess Dexin’s price will be refreshed higher this week,” a large trader said.
The SteelOrbis reference price for ex-China 3SP billet is at $500-505/mt FOB on October 31, increasing by $5-10/mt over the past week. “Offers for 5SP are up to $510/mt FOB, but 3SP or Q235 can be at slightly below $500/mt FOB,” a Chinese trader said. Prices in China have been supported by the recent government stimulus and expectations of an increase in construction and infrastructure spendings in the fourth quarter. However, steel production cuts have been not as severe as expected, so prices cannot rise too rapidly and confidence in the uptrend is still not so strong and prices are mainly being pushed up by high raw material prices and by sentiments.
The average local Chinese billet price stands at RMB 3,525/mt ex-warehouse, moving up by RMB 75/mt ($10/mt) over the past week. This level translates to $435/mt, excluding 13 percent VAT.
At the same time, though a mainly positive mood has prevailed in Asia, buyers have been reluctant to accept higher prices in deals. Moreover, according to sources, around 30,000 mt of 150 mm billet were traded by a Russian mill to Taiwan at $490-493/mt CFR late last week, down from the previous deals at $495-498/mt CFR, as SteelOrbis reported earlier.