On Thursday, May 4, the first working day after the Labor Day holiday, local steel prices and futures prices in China have posted a further decline, indicating the continuing bearish sentiment in the market. Major Chinese and ASEAN region-based mills have held prices at the same low levels as before the holidays, but a further decrease is possible, so traders may return with aggressive short sales offers to Southeast Asia.
Ex-China 3SP billet offer prices are still at $520-530/mt FOB this week, while Chinese traders have resumed offering open origin billets in positions at $525-535/mt CFR to Southeast Asia, also stable over the past week, as they expect prices to go down further. “Though traders are less aggressive now, I think next week they will more active, especially if futures continue to go down,” a trader said.
In addition to Chinese traders’ offers, ex-Russia 130 mm 5SP billet has been available at $525-530/mt CFR. One deal for ex-Russia material was reported at $530/mt CFR, but as having been done last week, according to market sources. “For now, everything is still decreasing. It is hard to say when the market will stabilize,” a Manila-based importer said.
In Taiwan, the last deal for ex-Russia 3SP billet was done at $522/mt CFR last week, slightly below offers reported at $525-530/mt CFR.
Offers for ex-ASEAN IF billets, which are sometimes preferred by customers in the region due to its low price, have been at $510-525/mt CFR Manila. The lower level of $510/mt CFR is for one ex-Thailand IF billet cargo from a trader. Though most sources believe this level is too low for the current market, “with the falling scrap for June shipment, this $510/mt CFR may no longer be a kamikaze,” an international trader from Asia said.
Ex-ASEAN mills have been voicing offers at $530-540/mt FOB this week, slightly below $540/mt FOB reported last week. But, in fact, prices have not changed much, according to sources, as even last week mills were ready for discounts.
The SteelOrbis reference price for imported billet in Southeast Asia has remained at $525-540/mt CFR, stable over the week.
The average local billet price in China stands at RMB 3,540/mt ex-warehouse on May 4, down by RMB 70/mt ($10/mt) over the past week and down RMB 28/mt ($4/mt) from the previous working day. This price translates to $454/mt, excluding 13 percent VAT. The SteelOrbis reference price for imported billet in China has lost another $5-10/mt over the past week, coming to $450-455/mt CFR.
$1 = RMB 6.9054