After weeks of relatively slow billet trading, the leading mill in the ASEAN region has managed to accelerate sales lately, supported by some discounts which attracted sellers, and by higher scrap prices which bolstering sentiments among traders.
A deal for ex-Indonesia 3SP billet was done at $508/mt FOB last week, according to number of market sources. Later, at least one and some said two contracts were signed at $510-515/mt FOB. In total, up to 70,000-90,000 mt of billet for January shipment have been booked.
New offers from the Indonesian mill have been voiced at $520/mt FOB late on Tuesday, up slightly from $515-520/mt FOB reported last week. “They are eager to sell, so they held prices at $515/mt FOB. After selling over 50,000 mt, they will try to increase offers slightly,” a Chinese trader said.
Though the final destination for the recently booked lots has not been disclosed, market sources agree that some of it will go to Turkey and some may be for the Latin American market. After the latest increase in ex-US scrap prices to $415/mt CFR Turkey, Turkish importers have been looking for imported billets. “All [tradable billet prices in Turkey] will depend on where scrap sits. The Americans offered [HMS 80:20] at $425-430/mt CFR, and it seems that even $425/mt CFR was withdrawn. If so, [the workable billet price] should be above $545/mt CFR,” a trader in Turkey said. Another Asian trader also confirmed that, with freight at around $35/mt for a large volume, “Indonesian prices are workable for Turkey.” Some new offers have been reported at $550-560/mt CFR.
While the Indonesian mill has been selling billets, Malaysian and Vietnamese mills have still been focusing on other products, on rebar, wire rod and slabs.
The reference price for ex-China 3SP billet has remained at $530/mt FOB on average with exports almost being at a standstill. However, the negative trend will deepen in the coming weeks, while market sources do not exclude that China will come back with more competitive offers. Average local billet prices in China have settled at RMB 3,680/mt ex-warehouse on December 5, down by RMB 28 ($4/mt) on average over the week, and translating to $458/mt, excluding 13 percent VAT.
$1 = RMB 7.1127