China’s local and export price levels for billets have indicated some increases supported by sentiments, though demand has remained on the low side. As a result of less aggressive Chinese export offers, import prices in the Asian market have rebounded, but the sustainability of the trend is questionable, some market sources believe.
Ex-China 3SP billet price has added $10/mt early this week to $480-500/mt FOB. This level has been assessed as tradable, while official offers are closer to $500/mt FOB. As a result, the official offers from China for 3SP have been reported at $510/mt CFR and above, while for 5SP they are at $520/mt CFR Southeast Asia. The tradable level is at $505-515/mt CFR Southeast Asia for imported billet for now, up from the bottom levels of $490-500/mt CFR in deals two weeks ago. “It seems that the market prices will stay between $500-520/mt CFR, unless China comes back to sell in the market,” a source said.
The possibility of China resuming more active exports by the end of this year is still looming. Market sources state that local demand in China is entering the recession season, “though there was no restocking [in the local market] in ‘Golden’ October,” a source said. “Probably next month demand may come back from Southeast Asia, as people will prepare for the next year of business,” a Chinese trader said.
The average local billet price in China has added RMB 73/mt ($10/mt) over the past week to RMB 3,628/mt ex-warehouse. This price corresponds to $453.5/mt, excluding 13 percent VAT. The appreciation of the RMB against the US dollar has made the increase in the dollar equivalent of this price even bigger. But overall demand has not been strong, with prices just rebounding from excessively low levels, according to market sources.
As a result, the SteelOrbis reference price for import billet in China has increased from $430-440/mt CFR last week to $450-455/mt CFR. “Dexin offered at $485/mt FOB last week, which is ok for Southeast Asia, not for China [in terms of imports],” a trader said.
