Mills based in the ASEAN region have provided some small discounts to sign further deals for billets. However, following two days of rises in steel and raw material futures in China, some hopes that the market is close to a bottom have emerged.
The offer level from the leading Indonesian mill has been reported at $490/mt FOB, down by $5/mt from early last week. The deal prices have also moved down, but very slightly, from $490-495/mt FOB to $487-489/mt FOB. A contract for 10,000 mt has been signed in the local Indonesian market at $488/mt FOB. Also, there has been active talk about the sale of a large volume of Indonesian material at $522-523/mt CFR to Turkey, which is equivalent to $487-488/mt FOB, excluding freight. There has been no confirmation about this deal, with the buyer rumored to be in the Iskenderun region, but most Asian market sources believe that the price is possible and is the lowest available nowadays from reliable sources.
In addition, another contract also for a large billet volume has been rumored at $515/mt CFR Turkey (equivalent to $480/mt FOB), but this information has been denied by a number of sources. It is heard that this level refers to Asian open origin billet, which is usually not so popular in Turkey due to higher risks. “I got this [$515/mt CFR] as a firm bid, but I don’t think that any trader would sell at this price. I think Turkish buyers were looking for $520/mt CFR for Malaysian origin,” a Chinese trader said.
The ex-China 3SP billet reference price has been at $480-485/mt FOB today, up by $2.5/mt on average from the previous day, and reflecting mainly local price levels, while firm offers would be at $490/mt FOB already, according to market sources.
Last week, ex-China 3SP 150 mm billets were sold to Taiwan at $490-495/mt CFR, translating to slightly below $480/mt FOB, but this level seems to be the lowest in the market and hardly achievable today. The main mill shipping from Russia’s Far East region has been trying to sell additional tonnages at $500/mt CFR after $500-505/mt CFR reported last week for 100,000 mt, but Chinese material has been more competitive.
Rebar futures have added 1.7 percent today, while average spot billet and rebar prices have gained RMB 15/mt and RMB 27/mt on the same day amid the news about Department of Raw Material Industry at China’s Ministry of Industry and Information Technology (MIIT) planning to hold a meeting with several major steelmakers to get a comprehensive understanding of the production and operation of the steel industry. Meanwhile, China’s National Development and Reform Commission (NDRC) held a meeting with major enterprises, aiming to promote the implementation of policies to drive more equipment renewal. “I am looking for the outcome of the meeting today, but it seems nothing has come out of it yet. At least China’s domestic market is a bit bullish,” an Asian trader said.
However, optimistic sentiments among market players have been very cautious. “China’s market is still looking weak. I think there is still some room downwards, but perhaps not as sharp as before,” a source in Singapore said.