Amid the weakening of sentiments in the Chinese local and export billet markets early this week, prices from major Chinese and ASEAN mills have been corrected down slightly after the short-lived uptrend seen last week. Even some improvement in demand in major markets has failed to support prices, but the future trend will be highly dependent on how sentiments develop in China.
Ex-Indonesia billet offers for July shipment were corrected down by $5/mt yesterday and by $5/mt today, coming to $430/mt FOB. There has been a rumor that some volume of Indonesian billet has been traded to the Middle East, to Saudi Arabia specifically, though the final price has not been available by the time of publication. The latest offers for Asian billets to Saudi Arabia were at around $467/mt CFR, and, though some volume could be traded with some discounts, large buyers are waiting for $455/mt CFR at the highest. “Dexin just dropped the price, and this is reflecting the weak market in my opinion,” a Singapore-based trader said.
Ex-China billet reference price is at $425-430/mt FOB today, moving down by $2.5/mt on average from $425-435/mt FOB late last week. Though this is just a small correction, after some sellers tried to increase offers to $438-440/mt FOB early this week, most offer prices have moved down closer to $430/mt FOB again for now, sources said. “The market in Turkey is better [due to the scrap trend] and the Asian offers may be reasonable [for buyers], but China itself is not in the best shape and lead times are a problem,” a large Chinese trader said.
There has been talk in the market that a lot of Chinese billets has been sold to Turkey at $466-467/mt CFR to a merchant bar producer, but the information has not been confirmed by the time of publication. Many do not consider such a level to be a surprising one, since it had been the lowest available from the end of last week and, in fact, it makes more sense for a merchant bar mill rather than for a rebar producer. The latter are aiming to get Chinese billet at not above $460/mt CFR, while offers are mainly at $465-468/mt CFR and slightly above at the moment.
In Asia’s import billet market, negotiations have been at a slightly lower level with some deals rumored as well. In particular, ex-Russia billet was transacted at $448-450/mt CFR Taiwan early this week, but by Wednesday ex-China 3SP offers to Taiwan have dropped to $445/mt CFR Kaohsiung, which translates to slightly below $430/mt FOB. Some bids from Thailand have been reported at $443/mt CFR, but no fresh deals have been reported so far. Nevertheless, some 3SP billet is heard to have been sold to Southeast Asia at $445-450/mt CFR to one of the buyers from Indonesia. This means that the reference price for import billet in Southeast Asia has already lost $5/mt since late last week to $445-450/mt CFR.
