Export prices for billet from Asia have remained stable after the May Day holiday and trading is still rather limited as the future trend is still unclear. Though today, May 7, China announced new stimulus measures and there are hopes for an easing of the trade war between the US and China, this has provided very small support to the steel market so far with demand-supply fundamentals having a bigger influence.
The SteelOrbis reference price for ex-China 3SP billet is stable at $425-430/mt FOB since last week. “I didn’t see many deals lately, but the reasonable price for Asian exporters is $430/mt FOB,” a Chinese trader said. An official offer for ex-Indonesia billet for July shipment is also unchanged at $430/mt FOB. The indicative price for ex-Malaysia billet has been reported at $440/mt FOB for July shipment as well.
Today, Chinese rebar futures at the Shanghai Futures Exchange gained slightly by 0.19 percent, while the average local price has improved by RMB 17/mt ($2.4/mt) from yesterday to RMB 2,990/mt ($415/mt) ex-warehouse. This happened following news that the People’s Bank of China has decided to cut the reserve requirement ratio (RRR) for Chinese banks by 0.5 percentage points effective as of May 15. This will release RMB 1 trillion ($0.14 trillion) in long-term liquidity into the market.
The major influence on the billet market in Asia has been coming from the high level of steel production in April and the lack of news about a change in this situation so far this month.
In Southeast Asia, offers for Chinese billet have also been stable or slightly higher as traders have not been very eager to offer in a short position anymore, not being sure of the future price trend. Offers for 3SP have been heard at $445-450/mt CFR, while offers for 5SP have been heard at $450-460/mt CFR, though buyers’ price ideas are still at least $5/mt lower.
In Turkey, offers for Chinese billets have been at $462-465/mt CFR, but neither buyers nor sellers have been active in negotiations and the bids would still hardly be above $450/mt CFR. Offers for ex-Indonesia billet are at $465-467/mt CFR, while ex-Malaysia material has been quoted at $473-475/mt CFR, but no interest has been seen from buyers due to the excessively long lead times.
