Ex-ASEAN billet suppliers have kept prices stable this week after the slight increase seen in the previous week as there has been no strong push from China. Oversupply is still the main problem in Asia, since, even though more positive news about the property market in China has been seen recently, production has also been high and demand has failed to improve much so far. As a result, Asian buyers have been focusing on cheaper alternatives such as Iran and Russia.
An Indonesian mill has kept its official export offers for 3SP/5SP billets at $500-505/mt FOB and no new deals have been reported after the previous offers at $495-497/mt FOB around 10 days ago. “There is no change and no demand [for ex-ASEAN billet],” a trader said.
At the same time, offers for ex-China billets have remained stable since late last week at $500-510/mt FOB. Credit data released on Monday in China has been better than expected, indicating that an improvement is expected in the real estate market in China. In August, new Chinese currency loans increased by RMB 86.8 billion ($12 billion) year on year, much higher than the poor performance in July at RMB 345.9 billion ($48 billion). This figure was supported by the Chinese government easing its policies for first-time home purchases. The good credit data has supported futures prices over the past few days, while iron ore prices have also increased significantly and coking plants have sought to increase coke prices by RMB 110/mt. However, demand for billet and rebar has been not enough to push up steel prices in China much, at least for now, with production levels remaining high. Average local billet prices have added RMB 10/mt ($1.4/mt) from the previous day to RMB 3,555/mt ex-warehouse on September 12. However, the level is still RMB 28/mt ($4/mt) down over the past week. This price translates to $437/mt, excluding 13 percent VAT.
In the import billet market in Southeast Asia, the lowest offers for ex-ASEAN and ex-China 5SP billet are still coming at $520-525/mt CFR Manila and no activity has been seen. However, there are reports that 30,000 mt of ex-Iran billet have been traded to Indonesia at $503/mt CFR. Though this price is slightly above the last deal reported to Thailand at $498/mt CFR, market sources said that there are very few cheap options in the market.
Moreover, ex-Russia 150 mm billet has recently been offered to Taiwan at $495-500/mt CFR, versus offers at $505/mt CFR seen last week. Market sources believe that new deals are not possible above the previous sales at $495/mt CFR reported in late August.
$1 = RMB 7.1986