Major ASEAN mills have decided to hike billet offers once again this week or have withdrawn offers altogether as they have managed to sell large volumes of steel products in the past week and unsold allocations for January shipment are very limited now. Moreover, the mood in China has continued to strengthen.
New offers for ex-Indonesia 3SP billet have added $10/mt to $535/mt FOB, which is $15-20/mt above the level seen last week. The latest deal was reported at $515/mt FOB signed early this week for a trader’s position. “Still $515/mt FOB was the last sale as per my understanding, but they sold a lot of slabs,” an Asian trader said. Though overall demand for billets has been moderate, the Indonesian producer has managed to achieve better prices and sales volumes of slabs with up to 150,000-180,000 mt of slab alone traded to different sales destinations since last week. As SteelOrbis reported earlier this week, a part of this tonnage was for the European market and the deal price level was at $550-555/mt FOB. Taking into account that the total monthly semis allocation of the Indonesian producer is 300,000 mt minimum, for now over 250,000 mt for January shipment have been sold. New offers for slabs from Indonesia are at $580/mt FOB, “not a realistic price increase, but they have time to wait and see,” a trader said.
Also, the Indonesian mill has increased wire rod offers by $10/mt to $565/mt FOB.
There have been no fresh offers for ex-Malaysia billet with the previous ones at $520-525/mt FOB, but they have been withdrawn now. According to market sources, Malaysian sellers managed to sell an additional 100,000 mt of slabs recently, following sales of a minimum of 80,000 mt reported by SteelOrbis a week ago.
Moreover, ASEAN billet suppliers have been supported by the positive mood in China. “These new prices [from Indonesia] are not surprising given Chinese futures prices, which have been pushed up by better expectations and injections of money into property,” a Chinese trader said. Rebar futures at Shanghai Futures Exchange have added 2.39 percent today, while the reference billet export price from China is standing at $535-540/mt FOB now, up by $7.5/mt over the past week.