Though official offers and tradable levels for ex-ASEAN billets from mills have remained relatively stable after drop seen over the past two weeks. But bids from SE Asian customers have been still at lower levels and bearish moods have been growing in the region since the Chinese market has been showing some weakening lately, SteelOrbis has learned from the market on July 11.
The official offers for ex-Indonesia billet have been at $505/mt FOB, which is in line with the latest deals on average. Previous offer price was at $510/mt FOB two weeks ago, then early last week there was a deal to Vietnam at this level, which was the highest lately. Also last week a few contracts at $500/mt FOB or just slightly above were done for the Philippines and Indonesia. In fact, nowadays, the mill has been offering the same price which has been fixed with the specific customer lately. “Dexin’s offer is not too clear, they sold at $510/mt FOB early last week and there were also sales at $500-505/mt FOB, so all depends on the destination, but demand is weak everywhere, so deals stopped to come,” a Singapore-based trader said.
“Buyers are waiting for prices to drop further, so demand is not there now,” another trader said.
At the same time, ex-China billet prices have softened since last week. The reference price level has bene at $500/mt FOB on average, down by $10/mt since last week. Though the official offers from China have been still at $505/mt FOB, similar to ex-Indonesia prices, most market sources said that Chinese traders have started to be more active in providing a bit lower levels with $500/mt FOB could easily be found.
The SteelOrbis reference price for import billet in SE Asia has been at $515-520/mt CFR, slightly down from $520/mt CFR last week. These prices reflect the highest tradable levels and offers from Chinese traders, while ex-ASEAN mills’ prices have been still higher - $525/mt CFR and above. “Chinese traders are flooding the market with open origin offers, which are at $520/mt CFR Manila,” a third trader said. While another source added that he started to see offers at $515/mt CFR for 5SP for August shipment, though “while there are no deals, we cannot say if the market is there or not. All these prices are for short positions,” he said.
The local Chinese billet price is at RMB 3,518/mt ex-warehouse on July 11, down by RMB 47/mt or $6/mt over the week. This price translates to $433/mt, excluding 13 percent VAT. So, the reference price for imported billet to China has been lowered to $430/mt CFR versus $435-440/mt CFR last week.