Much lower import slab prices in deals to China have been disclosed to the market recently, which are expected to place further pressure on semis quotations in Southeast Asia next week, when all customers return from the holidays, SteelOrbis has learned.
According to market sources, a contract for 43,000 mt of ex-Russia billet was signed to China at around $630/mt CFR last week, which is equivalent to RMB 4,700/mt including 13 percent VAT. This price is $43/mt below the previous deals to China. This new contract was from a non-traditional Russian supplier for Asia, which was cut off from its main European market due to sanctions. “I think this is very low, but it is a fact,” an Asian source said.
Moreover, new negotiations have already been heard at $620/mt CFR China.
Though the mood in the Chinese market improved yesterday, May 5, the first day after the holidays, today HRC futures prices in China have fallen by RMB 184/mt ($28/mt), signalling still bearish sentiments.
As a result, market participants are waiting for further drops in the slab prices to Southeast Asia. The whole week Indonesian customers have been out of the market due to the holidays. Other buyers are still in a waiting position. The last reported deal for ex-Russia slabs to Southeast Asia was at $740/mt CFR, as SteelOrbis reported earlier. But at the moment, the tradable level is assessed as being hardly above $700/mt CFR. Also, Taiwanese importers may decide to purchase from Russia if the price is low enough (far below $700/mt CFR) and if it is possible to open LCs.
The SteelOrbis reference price for imported billet in Southeast and East Asia has been indicatively cut to $720-830/mt CFR, with the midpoint at $775/mt CFR, down by $20/mt over the past week. The higher end of the range corresponds to the level of offers for ex-Asia slabs.
