Prices for ex-ASEAN billet have stabilized at last week’s levels as more deals have come to light recently and suppliers are not in a hurry to push more volumes at lower prices, with cautious optimism emerging. Though all eyes are still on the Chinese billet market after the sharp drop on Monday, today futures prices have rebounded, making most market players cautious about their further moves.
The main Indonesian mill has kept its offers for 3SP billet at $520/mt FOB, while indicating a $5/mt higher level for 5SP. Following reports of 50,000 mt of ex-Indonesia billet sold last week to the South American and Asian markets at $515/mt FOB, market sources have said this week that in total the mill managed to trade 100,000 mt last week and early this week, with the major part going to traders for positions. This FOB price translates to $535-540/mt CFR for Southeast Asia, which has already been confirmed in a number of deals for Chinese origin. For Turkey, this price is equivalent to $550/mt CFR, taking freight into account. “They sold out a good part of April shipment, so no need to drop prices too much more,” a trader said. There is still a lack of offers from Malaysian mills, as suppliers are focusing on wire rod, rebar and slabs.
The ex-China 3SP reference price has settled at $510-515/mt FOB on February 27, up by $5/mt from the previous day, amid today’s rebound in futures prices. Though the level is still $5-10/mt below that seen late last week. “The market situation does not change much, while the sentiment turned more positive and steel futures gained around RMB 50/mt... Local sales [in low volumes] are improving, while the approach of spring may result in more speculative buying and demand soon,” a large Chinese trader reported.
In Southeast Asia’s billet market, the tradable level for April shipment billet (both 3SP and 5SP) has been at $535-540/mt CFR since last week, with at least one deal for 5SP billet with 0.8 percent manganese content at $542/mt CFR Indonesia. However, on Monday, a few traders have voiced offers for 150 mm and 130 mm 5SP billets at $530/mt CFR and $532/mt CFR Manila, respectively, for shipment in May. “I am not sure if buyers can get this low today. Seeing futures going up today, sellers may go away,” one more trader said.
Ex-Russia commercial billet sales to Taiwan have been done at $515-518/mt CFR for May shipment, down from the previous level of $525/mt CFR. There have been no reports of sales of Iranian billet to Asia recently, but the tradable level, based on offers voiced by traders, is assessed at $520-525/mt CFR.