Prices for billet from the major ASEAN mills have continued to go down this week, making the gap with ex-China offers almost non-existent. China’s still negative market performance and poor demand have been putting pressure on prices. Moreover, Chinese traders have also become more aggressive in Southeast Asia’s import billet market, providing proof of the continuing bearish outlook, SteelOrbis learned from the market on May 23.
The leading Indonesian billet producer has cut its offers for 130-150 mm billets to $500-505/mt FOB, down by $5-10/mt since last week. “So, the Indonesian price is at the same level as compared with Chinese origin. It’s still on a downtrend, so everyone is asking for lower prices,” one seller of ex-Indonesia billet said. No new deals have been reported so far as traders are taking their time before taking July shipment positions and as the market is still so bearish. The last offer from the Malaysian producer has been at $520/mt FOB officially, but market sources believe that the level is unreasonable in the current market conditions and may be easily lowered in negotiations.
At the same time, much lower offers for imported billet have been started to come from Chinese traders in the Southeast Asian market. A few traders have reported offers at $515-520/mt CFR Southeast Asia, with the lower end for 3SP and the higher end for 5SP, down from $525-530/mt CFR at the lowest last week in offers for EAF/BF billets. However, a number of end-users have already received offers from traders for open origin at $510-515/mt CFR Manila for 5SP.
“Chinese traders are offering $510/mt CFR in position. This will be lower than Dexin offers, but typically traders will offer lower if they have a view of a further downtrend,” a Singapore-based source said, adding that even such low prices have failed to attract customers as “bids will likely come in at sub-$500/mt CFR levels.” A source in Manila said that the market has become stuck and buyers prefer not to give any firm offers.
The SteelOrbis reference price for imported billet in Southeast Asia has been lowered from $515-535/mt CFR last week to $510-525/mt CFR, where the lower end of the range corresponds to traders’ offers, while the higher end represents the level seen from mills.
Ex-China billet prices have come down to $500-520/mt FOB, down by $15/mt on average from last week, with the lower end of the range being assessed as the current tradable level.
The average domestic billet price in China is at RMB 3,448/mt ex-warehouse, down by RMB 55/mt ($8/mt) over the past week. This level translates to $434/mt, excluding 13 percent VAT. The tradable price for imported billet in China has been lowered by $5/mt to $440-445/mt CFR, still too low for all major global suppliers.
$1 = RMB 7.0326