Following the sharp fall in the local Chinese billet market, Chinese traders have started to test the export market with lower offers, after their offers were uncompetitive earlier. However, taking into account bearish sentiments prevailing in Southeast Asia and the sharp drop in prices by other major sellers into the region, Chinese prices have remained too high for most importers, market sources have told SteelOrbis.
The majority of billet export offers from China have been at $600-630/mt FOB, down by a huge margin of $75/mt over the past week and down $50/mt since late last week. “There are no deals, as all buyers are in a wait-and-see mood,” one Chinese trader said. Another Chinese source commented that sellers are considered to be selling at $600/mt FOB for Chinese origin billets, but there is not much demand. “I don’t think that the price is competitive enough,” a third Chinese trader said.
A price of $600/mt FOB corresponds to $625-630/mt CFR to the Philippines, but “it is too high for Southeast Asia. Buyers are expecting $590/mt CFR or below,” an international trader said.
At the same time, the first ex-ASEAN billet offers in the Asian region have emerged at a sharply lower level since last week - at $580-590/mt CFR Manila, according to some traders, though last week the lowest offer for that origin (EAF or BOF) to the Philippines was $640/mt CFR. “The Chinese offers are not competitive as the market is already lower now,” a local source from Manila said.
At the same time, Russian billet suppliers are asking Chinese importers for bids. Even though the tradable level to China has fallen to $510/mt CFR at the highest compared to a deal at $535-540/mt CFR last week, Chinese traders may purchase ex-Russia billet for re-export to Southeast Asia.
The SteelOrbis reference price for import billet in Southeast Asia has fallen by $50/mt from last week to $590-600/mt CFR for now.
