Chinese traders have started to offer ex-China origin billet in the market more active this week as its prices on FOB basis have been more competitive compared to ASEAN, where mills have been standing on the previous levels. As a result, at least one deal for ex-China billet has been reported to the Asian region.
According to market sources, 30,000 mt of ex-China 5SP 150 mm modified billet have been sold to the Philippines at $505-507/mt CFR, down from indications reported at $510-515/mt CFR earlier in the week and up to $520/mt CFR in the previous deals for ex-ASEAN material to the country. The price has been considered low by most local sources. One trader said that $507-510/mt CFR was available for the Chinese material in the first half of the week, but after small increases in futures in iron ore prices since Wednesday, there have been not many too low offers for Chinese origin. In particular, he mentioned the lowest offer at $512/mt CFR on Thursday. Nevertheless, another trader said that this level is reasonable as in general the sentiment in China is still negative and this deal is translating to $485/mt FOB, which can be found from some mills already.
No deals have been reported for Chinese origin in other SE Asian countries as buyers have been cautious and wait for some more declines. Bids for ex-China billet have been reported at $495-500/mt CFR. “The lowest offer I heard for Iran was still $505/mt CFR, while bid price is $500/mt CFR,” a source from Bangkok said. The SteelOrbis reference price has been corrected down little bit more by the end of the week – to $501-512/mt CFR with $506.5/mt CFR on average, down by $1.5/mt from Wednesday and $6/mt over the week.
At the same time, ex-ASEAN billet prices have failed to decline much. The latest deal for a sizable lot has been done by the Indonesian mill at $495/mt FOB, similar to the previous bookings, even though the mood has worsened since then. “I heard that it was for Latin America… I am confused about this price, it's so high,” a Singapore-based source said. Latin American customers have been looking for 80,000 mt of billet in total this week and over the past months these inquiries have been covered by ASEAN mills, considering limited options for buyers and good price for the sellers, compared to other markets. Asian buyers will target not above $490/mt FOB from ASEAN in next bookings.