Traders secured billet when an Indonesian mill lowered prices on Wednesday. While the mill has since raised its export prices, the mill's price cut reflects a fundamentally weak market. The Indonesian mill sold 150mm 3sp billet for July shipment at $495/t fob on Wednesday, including a booking by an international trader for 20,000t to a Thai EAF mill. This was a significant drop from the mill's previous offer of $500/t fob for billet and $510/t fob for slab. Freight costs from the mill's Indonesian discharge port to the region are around $20/t, depending on destination.
Wednesday's bookings were for at least 30,000t, with another source estimating 40,000t. Traders took the billet cargoes to take profit on previous short positions, a regional trader said. However, he does not think that many end-users in the ASEAN market will pay $520/t cfr because finished steel demand is weak. A Chinese trader reported that the mill resorted to price-cutting because it needed to fill its order books. The mill sold 27,000t of 3sp 150mm billet last Tuesday at $498/t fob.
The Indonesian mill has now raised its export price for 3sp 150mm billet to $505/t fob. "There may be a chance for a $5/t discount," a Jakarta trader said. A Vietnamese mill is offering 3sp 150mm billet at $505/t fob after closing a 45,000t deal last Tuesday at $495/t fob. "It is the market level and will not change much," a Vietnamese trader said on the deal price of $495/t fob.
