The rebound today, June 4, in Chinese futures prices and higher raw material prices have resulted in a change in mood in the Asian billet market, at least for the near future. Some offers from Chinese billet exporters have increased, but market sources do not believe in a clear uptrend.
The ex-China billet reference price has settled at $410-430/mt FOB, up by $5/mt on average, with the higher end going up by $10/mt. Most offers have been reported at $420-430/mt FOB lately, while the previous deals were done at the equivalent of $410-415/mt FOB. “The main trigger for today’s increase comes from the cost side and also from the rebound after previous continuous falling,” a Chinese trader noted. Two more traders said that the futures rebound may help the market to stop falling but a further increase is questionable as “demand concerns will only grow from June onwards.”
A few deals for Chinese billets at lower levels were heard late last week and early this week. In particular, sales to Taiwan were done at $435/mt CFR for base grade 3SP billet and at $458/mt CFR for vanadium-added material. This confirms that Russia has lost its competitiveness to China as it offers to Taiwan have been at $445/mt CFR or just slightly below. Also, there has been a rumor about transaction to Southeast Asia at $435/mt CFR, also for 3SP. The latest deals in the Asian region translate to around $415/mt on FOB basis.
In addition, a contract for 50,000 mt has been signed to Turkey at $452/mt CFR.
The major Indonesian mill has announced its billet offers for September shipment at $425/mt FOB today, down by $3/mt from a day earlier, which is a response to the downtrend seen in China early this week. No new deals have been reported for ex-ASEAN billets this week.
