Following the increase in Chinese futures prices in the first half of the week, the market has been waiting for higher billet prices to be confirmed by ASEAN region-based mills. But in fact, so far, the latest deals have posted just a $2-3/mt rise from the previous level reported early this week and are up $5-7/mt compared to those signed in the first half of last week. Major end-users, in Asia in particular, have been resisting the uptrend, and so traders have been cautious in accepting higher prices from ASEAN mills.
The official offer price for ex-Indonesia billet has been reported at $505/mt FOB since yesterday, up by $5/mt from the earlier level. Around 20,000 mt of 3SP billet from the Indonesian mill have been traded at $497-498/mt FOB this week, versus the $495/mt FOB deal done late last week and $490-493/mt FOB contracts reported in the first half of last week. “They [Dexin Steel] were unwilling to lower offer prices to $500/mt FOB yesterday. But given China’s SHFE [Shanghai Futures Exchange] movement today, they will likely lower prices,” a Singapore-based trader said. Today, rebar futures at SHFE have declined for the first time this week, by 0.29 percent, amid “the stronger dollar and the Chinese steel market failing to recover quickly,” a source said.
In the import billet market in the Philippines, some market sources report relatively stable offers for 5SP billet at $520-525/mt CFR and the tradable level is at around $520/mt CFR. “Dexin FOB is higher, but traders are holding positions,” a trader said. However, some importers in Southeast Asia have reported higher offers already voiced by some traders for BOF material at $525-530/mt CFR to the Philippines and Indonesia.
“So far, we see offers are increasing, but buyers are resisting. This is probably due to the Chinese futures rally but buyers are cautious as demand remains gloomy. In some markets in Southeast Asia, we saw yesterday an improvement in apparent demand for rebar. If it sticks and spreads, then billets will also benefit from it. Personally, I think the fundamentals remain the same and thus I doubt the price increase will be sustained,” an international trader said.
Offers for ex-Iran billet to Thailand are at $510/mt CFR, relatively stable from last week. Traders’ offers in short positions are still there at $515/mt CFR or slightly above, as market sources believe that the latest uptrend will be short-lived.
The SteelOrbis reference price for imported billet in Southeast Asia stands at $515-520/mt CFR, with the lower end of the range increasing by $5/mt over the past week.