ASEAN mills have dropped billet export prices sharply, by $35/mt since last week, following further declines seen in China, and are trying to accelerate sales, which have been very slow recently. But only a few deals have been reported at new levels as buyers are cautious in purchases in such a falling market, SteelOrbis learned on April 4.
The major Indonesian producer has cut its offers to as low as $565-570/mt FOB, down from $600-605/mt FOB last week. On Monday, offers were at $580/mt FOB, but a number of sources have confirmed that, on Tuesday, the $565-570/mt FOB range has become the official offer level, easily obtained from the mill. Moreover, some said that $560/mt FOB is also possible in negotiations.
But even after such a sharp price drop, sales have remained limited. Market sources have reported a few trades at $585/mt CFR (around $565-570/mt FOB) for ex-Dexin 150 mm billet in the local market in Indonesia. “As Iranian prices were at $590-595/mt CFR, it is better to buy from Dexin now,” a source in Jakarta said.
In the Philippines, the tradable level for 130 mm 5SP billet has come to $590/mt CFR, down by $10-15/mt from the previous week. “Buyers are staying away. I suppose it will be quiet until after Easter,” a Singapore-based trader said.
Chinese traders have become aggressive again as they believe prices still have room to fall further. One deal for ex-Dexin 150 mm billet has been done by a trader in a short position at $572/mt CFR Taiwan, the lowest level seen in the market lately. This proves the negative expectations of traders.
Ex-China official offers have been at $570-580/mt FOB, down by $20/mt from late last week. However, Chinese traders have been ready to provide discounts with a number of offers for 3SP 150 mm billet reported at $580-585/mt CFR in Southeast Asia. “Some traders try possibilities of short sales as the market was going down pretty quickly today,” a source from China said.
Average billet prices in the Chinese domestic market have declined to RMB 3,913/mt ex-warehouse, down by RMB 75/mt ($11/mt) over the week. This level translates to $504/mt, excluding 13 percent VAT. The reference price for import billet in China has dropped by $10/mt over the past week to $500/mt CFR.
$1 = RMB 6.8699
