The Asian billet export market has been calm ahead of the New Year holidays and absence of most major buyers. Though weak demand is likely to continue both in the Chinese local and export markets, prices are expected to remain supported at stable levels or some sellers even may try to increase them as the local currency hit its historical low.
Ex-China billet reference price has been stable at $430-440/mt FOB. New offers for March shipment are awaited at $440-445/mt FOB, versus $440/mt FOB late last week. “There is a shrinking trade volume in China and pressure on mills is big, while prices do not change much. Mills had more intention to control production in winter offseason period and visible restocking is not awaited in January,” a Chinese trader noted. Though demand is unlikely to improve soon, the appreciation of the Chinese currency will provide support to billet prices.
The offshore yuan passed the psychologically important 7-per-dollar mark, first time since May 2023, while official middle rate of People’s Bank of China is at $1 = RMB 7.0348. According to analysts, the trend is likely to continue in January as exporters will still convert more foreign currency into yuan ahead of the Chinese New Year.
“Most people have already been out of the market due to the New Year holidays, but some $5/mt increase in offers is possible amid stronger yuan,” a trader commented. The import billet price in SE Asia has been stable at $445-460/mt CFR with buyers’ price ideas are at the lower end of the range, while offers are at $455-460/mt CFR. “Iran can give $440/mt CFR, but I didn’t hear many offers,” a SE Asian importer said.
In Turkey, offers are awaited at $480/mt CFR or so, up by $5/mt compared to last week.