The downtrend in the Asian billet export market has accelerated this week mainly due to continuous fall in Chinese futures prices, triggered by current slow demand in the local Chinese market and the poor outlook for the near future.
The ex-China billet reference price for Chinese 3SP billet has settled at $420-425/mt FOB today, November 5, down by $2.5/mt on average from the previous day and down by as much as $10/mt compared to last Friday. Though no new deals have been heard for now, market sources believe that some traders may be eager to sell in short positions as they expect $418-420/mt FOB may be found from mills.
However, much further declines in Chinese billet export prices are unlikely, according to market sources, partially as raw material prices remain high and steel production is going to decline. “Even if futures do not rebound, the market may be close to the bottom, and some support may come after mills control allocations,” a Chinese trader noted.
In Southeast Asia’s import market, buyers in the Philippines assess the workable prices at hardly above $445/mt CFR, which is down from offers for 5SP voiced at $455/mt CFR last week. “There is not much trading at the moment in the Philippines as China’s futures prices are down, plus there is Typhoon Tino,” a Southeast Asian trader said. Typhoon Tino (Kalmaegi) affected central Philippines on Monday and Tuesday with dozens of people killed, and air and sea routes disrupted.
The tradable level for import 3SP billet in Southeast Asia has been assessed at $440-445/mt CFR. A deal for Chinese billet is heard to have been done at $447/mt CFR early this week, but market sources agree that this price should be for 5SP billets and does not reflect buyers’ price ideas for base 3SP billet.
Negotiations for Chinese billets have intensified in the MENA region. There has been talk that a sale to Turkey was discussed at $455/mt CFR, but there has been no confirmation that the deal was in fact done. Also, bids from Saudi Arabia are awaited at $450-455/mt CFR. Buyers in Egypt may consider buying at $470/mt CFR for DWR grade billet.
The Indonesian mill has followed the trend in China and cut its January shipment billet offer by $5/mt from last Friday to $435/mt FOB.