Sentiments in the Asian billet export market have been bearish early this week with futures and spot prices in China coming down despite announced production cuts. As a result, offers for ex-ASEAN billets have also moved down, though they are still higher than Chinese offers.
The ex-China 3SP billet reference price has inched down by $2.5/mt since late last week on average to $430-445/mt FOB, with the midpoint at $437.5/mt FOB. “I would say that $435-440/mt FOB is where China’s billet is today. But I am not hearing anything sold yet from China. With futures lower, buyers are also looking for lower prices,” a Singapore-based trader said. A large Chinese trader said that some mills have been officially offering at $435/mt FOB, but, with some traders’ margins, real offers from traders are slightly higher, though buyers are waiting for $430/mt FOB.
Though steel production cuts have been announced in Tangshan from March 4 until March 13 during the Two Sessions meetings, this has failed to provide support for steel prices in China, mainly as trade tensions with the US have intensified. Trump had stated via his social media account that the US would double recently the introduced tariffs on China to 20 percent on March 4. In retaliation, the Chinese Ministry of Finance has announced that it will impose 10-15 percent tariffs on food products from the US as of March 10 and that it will restrict exports to 15 US companies.
An official billet offer by the Indonesian mill stands at $445/mt FOB for May shipment, down by $5/mt from the level seen late last week. “It is too high, but they sold quite a lot previously, so there is no pressure,” a source said.
