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Korean billet export prices seen climbing higher - 16 December 2011

Korean steelmakers have strengthened billet export prices recently on higher scrap costs. Billet offer prices from mills, including Hyundai Steel, are around $630-635/tonne (€484-487/t) fob with deals also heard in this range. This compares with transacted prices of $620/t fob or $645/t cfr Philippines last week.

“Billet export offer prices have been steadily increasing this month and are expected to climb even higher,” says a Seoul-based trader who suggests a further $10-15/t hike could be possible depending on global scrap price trends. Buyers appear amenable to higher offer prices as they understand the justification of higher scrap costs, he notes.

Overseas traders are eager to book position cargo from Korea as they reckon prices will become firmer, an official with a Busan billet producer tells Steel Business Briefing. Bidding prices are currently around $625-630/t fob for position cargo at the moment, he says. His company is monitoring international scrap prices before deciding on their billet export prices. “Our billet stock levels are tight for now so we can wait until billet export market prices stabilise.”

Korean billet export bookings were quiet over the last two months due to weak demand. But total export volume of billet in January-October still rose by 47% year-on-year to 873,192 t, according to Korea Iron & Steel Association data. Market sources believe this uptrend is likely to continue through next year.

 

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