Chinese billet exporters have lowered their billet offer prices again early this week as demand in the local market in China is still weak and steel production is going to rebound soon after the short-lived slowdown. ASEAN mills have followed suit and have cut offers as well.
The ex-China billet reference price has settled at $425-440/mt FOB, down from $430-440/mt FOB late last week. Though last week most offers from China were at the higher end of the range - $435-440/mt CFR, at the moment most large traders have been providing $430/mt FOB in offers and the level is negotiable. Overall trading activity is still not great, but a few sources report that traders sold “a few cargoes” of Chinese billet to Turkey at $470-475/mt CFR last week. Though this information has not been confirmed by the time of publication, market sources believe that trading on the FOB market may improve soon. “The market is soft in China, so buyers [in Asia] are watching,” one of the large traders in China said. “Steel demand is still sluggish even considering March is in progress and daily debar trading is stuck at around 90,000 mt. We may notice debar demand had picked up with more capital, while flats demand is still slow,” another Chinese source noted.
In such conditions, the leading Indonesian mill has cut its billet offers by $10/mt to $435/mt FOB for May shipment. “Even though their order books are full, they need to follow China,” a Singapore-based source said.