This week has started with a decline in futures prices in the Chinese market, raising concerns that the uptrend in Asia may be halted in the near future. At the same time, after an active last week in terms of sales, ASEAN-based mills have kept offer prices stable after increasing them late last week, expecting some new orders to be closed this week.
In particular, the main Indonesian producer has been offering its August shipment billet at $520/mt FOB. The producer announced a $10/mt increase in prices just last Friday. The last deal was reported at $513/mt FOB to a trader for July shipment done late last week. A few market sources said that the producer has increased prices for August shipment, but most traders are not interested in them and the mill still has some July shipment volumes with order books closed for a bit more than half. Last week, most deals for ex-Indonesia billet were to traders targeting North Africa and Turkey, while this week the inquiries have already been reported from Latin America, Columbia and Ecuador, and Africa.
Unofficial offers from the mill in Malaysia have been reported at $520-530/mt FOB for July shipment.
Ex-China 3SP billet prices have remained stable since late last week at $510-530/mt FOB, but most offers have been reported at $510-515/mt FOB today. The average domestic billet price in China has inched down by RMB 5/mt ($1/mt) since Friday to RMB 3,525/mt ex-warehouse. Even though the decline in the spot market has been small, the retreat of rebar futures at the Shanghai Future Exchange by 1.06 percent and concerns over improvement in the real estate market in the near future have been impacting sentiments, which were positive during the whole last week. “The property weakness will likely be a multi-year growth drag for China,” said Goldman Sachs said in its latest report. The decline in iron ore prices has also added to the worsening sentiments.
