After the hike mills based in the ASEAN region attempted last week, their billet export offers have been corrected down slightly again, following the ongoing decrease in futures prices as well as in spot prices in China. Market sources believe that, if Asian suppliers want to continue seeing the sales observed over the past ten days, they will have to lower prices a little further, given the lack of improvement in demand in the Asian region.
Ex-Indonesia billet offers have come down to $510/mt CFR for 5SP billet, down by $5/mt over the past week, while for 3SP it is possible to get $505/mt FOB, market sources said. “So far, we have not heard of any new bookings [after the $502-510/mt FOB sales reported last week]. I believe they should consider $500/mt FOB,” a Singapore-based source said. “I’m sure today prices could be lower than $510/mt FOB in real negotiations,” a large Chinese trader said.
The ex-China reference price has settled at $490-500/mt FOB early this week, versus $500-510/mt FOB last week. “Nominally they [offers] are at $500/mt FOB, but, as futures are dropping, lower levels are possible,” a source commented.
Rebar futures at Shanghai Futures Exchange have fallen by 1.76 percent today after a decline of 1.51 percent yesterday, coming to RMB 3,675/mt. Today was the fifth day in a row when rebar futures indicated a negative correction, signalling the weakening mood in China as the pre-holiday restocking has been slower than expected. “I think it is hard to expect a significant rebound after the holidays. China’s export levels are still high, showing the local market is weak,” a local trader said.
Average local billet prices have lost RMB 90/mt ($12.5/mt) over the past week, coming to RMB 3,500/mt ex-warehouse on September 26. This level translates to $432/mt, excluding 13 percent VAT.
Following the softening mood in China, bids in Southeast Asia’s import billet market have also retreated. The relatively high offers for late October-November shipments for ex-China EAF and ex-ASEAN BOF 130 mm 5SP billet have been reported at $525-527/mt CFR since last Friday, while 3SP billet could be booked at as low as $518/mt CFR. However, market sources reported that, by Tuesday, more and more traders have been ready to provide $515/mt CFR for 5SP billet, in line with the latest ex-Russia sale. “Prices have dropped by an average of $5/mt over three or four days. Now offers from all origins are generally at $515/mt CFR levels. Buyers’ ideas are closer to $510/mt CFR for 5SP,” a Manila-based source said.
The SteelOrbis reference price for import billet in Southeast Asia has softened by $5/mt to $510-515/mt CFR.
