Chinese billet suppliers have started to be more active in the export market since last week as prices of Chinese origin billet have become more competitive after declines in the local market.
According to market sources, early this week a deal for 50,000 mt of ex-China billet was closed at $585-590/mt FOB. Though there has been no final confirmation of this deal, market participants agree that a trader could have taken a position for the future. Nevertheless, by Thursday, February 9, fresh negotiations for ex-China billet have been held at $580/mt FOB, with counterbids at $575/mt FOB. There has been no information on whether another deal was done. “I would say $590/mt FOB is not the price anymore,” an international trader said, adding, however, that sellers are not very aggressive, but are watching the situation in their local market. The SteelOrbis reference price has remained stable since Tuesday at $580-590/mt FOB, but is down by $10-15/mt from last week.
Though export activity has increased, it is still hard to say how long it may last, and some Chinese traders believe that, if the local market moves up next week, export opportunities will gradually decline. “It is still cold in China, so what is happening in the domestic market is understandable. I believe that a strong increase will come in March or earlier if the Chinese government offers another round of financial support,” a trader said.
At the same time, traders have been cautious in taking positions from ASEAN mills as they expect to get better prices in the near future. As SteelOrbis reported earlier, ex-Indonesia mill has offered at $595-600/mt FOB officially this week, down from $620/mt FOB before.
An average local billet price in China has come to RMB 3,903/mt ex-warehouse, down by RMB 27/mt ($4/mt) over the past week, but up by RMB 20/mt ($3/mt) from the previous day. This level translates to $509/mt excluding 13 percent VAT.
$1 = RMB 6.7905
