Mood in Asian billet market weakens after last week’s hike, but buyers gradually accept previous rises

Tuesday, 09 January 2024 16:26:33 (GMT+3)   |   Istanbul
       

Official offers for ex-ASEAN billet have remained stable or have declined slightly this week, following the softening of futures prices in China. However, the market in general has been assessed as firm since buyers have started to gradually accept previous rises, and not only buyers from distant markets but Asian customers as well. 

Official offers for ex-Indonesia and ex-Malaysia 3SP billet have been at $530-535/mt FOB, down by $5/mt from last week, with most market sources saying that mills are ready to sell at $530/mt FOB or slightly below and no more offers at $540/mt FOB have been reported as had been seen last week. 

The latest deal from an Indonesian mill has been reported at $529-530/mt FOB, just slightly below $530-532/mt FOB for 20,000 mt done last week. Market sources said that the previous tonnage has been offered and sold by a trader in the Asian market, while the destination for the recently sold material is still unknown. With the freight to Turkey at $35-40/mt, the recent transaction price translates to $565-570/mt CFR, which is still assessed as high. 

At the same time, some revival trading activity has been reported in the Southeast Asian market. In particular, a contract for 20,000 mt of Indonesian 5SP billet from a trader has been signed to the major buyer in the Philippines at $542/mt CFR. Though this price is above the reference price last week at $540/mt CFR and the tradable level of just $530-535/mt CFR in late December, market sources all agree that this price is already “very good for the buyer and impossible for the selling mill,” according to one source. At the moment, offers for 5SP BOF billet have been at $552-555/mt CFR and the lowest possible is $550/mt CFR, according to three Singapore-based trading houses. “The market is stirred by that deal. The price idea is increasing now,” a Manila-based source said. Another trader mentioned that he hears this deal was done for prompt shipment, though this could not be confirmed by the time of publication. 

The moods in the Chinese billet market has worsened over the past three days as futures prices have been going down, reflecting weak demand locally. The reference price for ex-China 3SP billet has been at $530-550/mt FOB, down by $5/mt on average from late last week. The average local billet price has settled at RMB 3,685/mt ex-warehouse, down by RMB 55/mt ($8/mt) over the past week. 

$1 = RMB 7.101


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