Prices for Chinese billet in both the local and export markets have been rather stable early this week owing to some slight support from the recent announcement made by the finance ministry regarding support for the economy next year, as well as the lack of urgent need on the part of mills to sell, even considering the ongoing slowness of demand.
The SteelOrbis reference price for ex-China billet has remained at $440-450/mt FOB since late last week. A few traders have said that overall export activity has been slack as mills have not been very eager to sell, while buyers have also been mainly out of the market due to end-of-year considerations and holidays. On Monday, December 23, the authorities in Handan initiated a level II emergency response to weather with heavy atmospheric pollution, which will impact some steel mills’ production and will limit transportation by trucks.
Among the supportive factors to the market has been the announcement of the finance ministry that it will focus on expansion of domestic demand in 2025 and will speed up fiscal expenditure as part of the new policy of the central government. There is talk that China is going to increase the issuance of special treasury bonds to as much as RMB 3 trillion ($411 billion) in 2025, from RMB 1 trillion this year.
Average local billet prices in China are at RMB 3,088/mt ($430/mt) ex-warehouse today, adding just RMB 3/mt from the previous day and RMB 8/mt since last Friday. “The local market is following a stable tendency and has changed very little from last week. This winter, restocking by buyers is much slower than last year,” a trader said.
The stability in China has also caused mills in the ASEAN region to keep offers for billets stable - at $445/mt FOB from the leading Indonesian mill and at $450-455/mt FOB from Malaysia.
In the slab segment, one of the Vietnamese producers has offered a lower price - $440/mt FOB, while the Indonesian offer is stable at $445/mt FOB. The latest deal for slabs in the Southeast Asian market was done by a Russian supplier at $455/mt CFR Thailand, which has been assessed as being relatively high compared to the previous tradable level from Russia at $440/mt CFR and the current offers from Asia at $460-465/mt CFR.