ASEAN-based mills, who had rolled over the billet offers last week despite the weak Chinese performance after the holidays, have decided to cut prices this week, seeing no improvement and lower tradable levels from the buyers in the region. In addition, ex-China billet offers have also gone down further, though trading has not resumed.
The leading Indonesian mill has lowered its offer prices by $20-25/mt from last week’s level to $595-600/mt FOB, while some sources said on Tuesday that it is possible to get even $590/mt FOB from Indonesian and Malaysian BF-based mills, which, however, has not been confirmed as official offers. One offer from Vietnam has been reported at $610/mt FOB. While the lowest level for ex-ASEAN billet from mills has been heard at $580/mt FOB from one Malaysian EAF-based producer, though some sources said that the producer has not been offering officially and that this is the level targeted by buyers.
Lower prices announced by ASEAN mills have followed the decline in import trade prices in Southeast Asia. For instance, two contracts for ex-ASEAN 5SP billet from traders have been done to the Philippines at $600-605/mt CFR. Moreover, early this week, most negotiations with traders have moved down to $590-600/mt CFR Manila, though there has been no confirmation regarding the signing of deals at this lower level.
The SteelOrbis reference price for imported billet in Southeast Asia has been lowered to $590-605/mt CFR with the midpoint at $597.5/mt CFR, down by $7.5/mt from $600-610/mt CFR seen on Friday, January 3.
At the same time, the offer level for Chinese origin billet in the export market has also moved down, following the local price slide. Offers for ex-China billet have been reported at $580-590/mt FOB, down from $590-605/mt FOB last week. “A Chinese 150 mm 3SP billet offer was at $605/mt CFR Manila. Not good enough for importers, but offering has returned definitely,” a Singapore-based trader said. Also, another trader said, “but I doubt they will export as the logistics to export Chinese billet is not so simple, better sell at these prices domestically.”
An average price for local Chinese billet has come to RMB 3,875/mt ex-warehouse, down by RMB 23/mt ($3/mt) from the previous day and down RMB 88/mt ($13/mt) over the past week. This level translates to $504/mt, excluding 13 percent VAT. So, the reference price for imported billet in China has slipped form $515-520/mt CFR to $500/mt CFR in these conditions.
$1 = RMB 6.7967