Though the recent steel production cuts announced in the major provinces in China up to the end of this year were expected to provide some support to the Asian billet market, this has failed to happen as supply is still outweighs demand. As a result, ASEAN-based suppliers have decreased billet prices slightly and some offers from China have remained at the low levels voiced last week.
Ex-Indonesia billet offers have officially declined to $500-505/mt FOB, down by $5/mt from the previous level. A deal for at least 10,000 mt of ex-Indonesia billet to a trader was done at a few dollars below $500/mt FOB late last week, which was also slightly down from the previous sales to traders reported at $501-505/mt FOB last week. “I would say Dexin was still at $500/mt FOB and quiet over the past few days. Any offers at $495/mt FOB and below will be from [Chinese] traders,” an international trader said.
Ex-China 3SP billet prices have been at $490-510/mt FOB with the average price just $5/mt above last week’s level amid the rise of the higher end of the range by $10/mt. At the same time, the lower end of the price range has remained stable from last week, and it is among the lowest in the market and has been reflecting still weak market conditions in China as well. “As of last week, billet was available from southern China at $490/mt FOB with load readiness within 30 days from order placement. There is no change as there is still more billet available than there are buyers,” another Asian source said. A third trader based in Singapore said that he believes $490/mt FOB is too low for the most Chinese suppliers at the moment with the recent monetary policy support from the government and increase in raw material prices.
In Southeast Asia’s market, offers from different sources for 5SP billet have been at $515-520/mt CFR Manila, almost in line with those reported late last week. “Overall sentiment here is really pessimistic. I personally have not much hope for a rebound in the near future,” a trading source said, commenting on the situation in the import market in Southeast Asia. Buyers have been trying to find cheaper alternatives. Bids for 5SP from the Philippines have been rare and all below $510/mt CFR, according to sources. There has been a rumor about an ex-Iran billet sale at $492/mt CFR to Southeast Asia, but this could not be confirmed by the time of publication.
The average billet price in China has been at RMB 3,523/mt ex-warehouse, up just by RMB 23/mt ($3/mt) over the past week. This level translates to $433/mt, excluding 13 percent VAT.
$1 = RMB 7.1992