Prices for ex-ASEAN billet from major mills have been corrected down again this week as suppliers have been trying to accelerate sales, while bids from the regional buyers in Asia have been at low levels and there have been no gains from China, even though some positive news for real estate market support has been reported since last Friday.
Ex-Indonesia billet offer levels have come down to $495/mt FOB, down by $5-10/mt from the official offers reported early last week. Some market sources said that small deals have been done at this new level to traders, though the details have not been available by the time of publication and overall sales are not expected to reach large volumes as end-users' bids are still going down and the near-term outlook is bleak. Ex-Malaysia offers have been reported at $495-500/mt FOB. “$495/mt FOB is available from everywhere, $490/mt FOB may be the next stop,” a trader said.
Ex-China 3SP billet reference prices are at $490-510/mt FOB on August 29, down by $10/mt on the lower end compared to late last week. Market sources believe that supply in the Chinese market will remain high in September and prices will be under pressure with no domestic demand revival expected in the short term as heavy rainfalls are predicted and the supportive measures announced by the government seem insufficient to bolster steel demand in the coming one-to-two months. As reported earlier, on Friday the Chinese government approved guidance for affordable housing construction, while at the same day the People’s Bank of China announced a new relaxation of residential housing loan rules. However, these measures have failed to support sentiments in the steel market, with rebar and HRC futures at Shanghai Future exchange losing 0.62 percent and 1.06 percent respectively.
The average local billet price in China stands at RMB 3,513/mt ex-warehouse today, down by RMB 10/mt ($1/mt) over the past week and down RMB 42/mt ($6/mt) since Friday. This level translates to $433/mt, excluding 13 percent VAT.
$1 = RMB 7.1851