The import billet market in both China and Southeast Asia have been inactive and the market mood has been negative, as already proved by the drop in ex-Iran billet prices in the region. At the same time, most deals done recently for billets in Asia have been done by Chinese traders, who needed to purchase from ASEAN region-based mills to cover previous position sales, SteelOrbis has learned from the market.
Since export billet sales from China have been halted lately due to high prices, Chinese traders have been working on covering their short positions. As a result, over the past week the leading Vietnamese mill has traded 100,000 mt of billet to Chinese traders at $485-490/mt FOB. At least 30,000 mt of this volume will go to the Philippines, and also a big part is for the Indonesian market, according to market sources. “These are all to cover Chinese traders’ short position,” an international trader said, adding that demand and prices are currently under pressure. “Indonesia is officially offering at around $495-500/mt FOB for 3SP billet,” another trader said. While according to a number of market sources, Chinese traders have also taken at least 30,000 mt from the mill at $490/mt FOB or just slightly above to cover previous sales.
Most of the deals signed by Chinese traders to Southeast Asia for ex-ASEAN materials were at $505-510/mt CFR, as reported by SteelOrbis earlier this month.
Moreover, according to fresh reports, a trader’s position deal has been signed to Taiwan for ex-ASEAN origin billet at $502-503/mt CFR and, though there have been no reports confirming the country of origin, some market sources believe it is Indonesia, since a week ago an offer from a trader was at $505/mt CFR for ex-Dexin material.
Previously, Taiwan had been focused on ex-Russia billet purchases with the last deal reported at $495/mt CFR for vanadium-added material. But “Taiwanese banks are becoming less supportive of Russian deals if US dollar payments are required,” a trader said. At the moment, the tradable level for base ex-Russia billet is still at $480-485/mt CFR maximum.
Negative sentiments in the Asian billet market have also been proved by the lower ex-Iran offers recently reported at $480-485/mt CFR to Thailand and Indonesia for January shipment. This is down from the lowest deal rumored to Thailand at $495-500/mt CFR in the last two weeks and previous traders’ offers at $500-505/mt CFR.
The average billet price in China is at RMB 3,683/mt ex-warehouse on November 29, up by RMB 63/mt ($9/mt) over the past week. This price translates to $453/mt, excluding 13 percent VAT. Local prices are still not good for most foreign suppliers, and “only Russia may consider to sell low if they are desperate,” a trader commented. The SteelOrbis reference price for imported billet in China is at $445-460/mt CFR versus $445-455/mt CFR, edging up just slightly over the past week.
$1 = RMB 7.1989