Despite expectations of some stabilization this week, the Asian billet export market has remained negative as market sources believe that China will delay new stimuli and that its steel production is higher than expected. Even though Chinese futures prices have not been falling so much this week, traders have been more eager to sell short, awaiting a further drop.
The ex-China billet reference price has been stable at $420-430/mt FOB, in line with the latest offers, but the tradable level has already been voiced lower today. “$410-420/mt FOB levels could be transacted today from China,” an international trader said. One of the main Chinese traders said that most deals are now in short positions done by traders to end-users, as “traders will get below $420/mt FOB in the current market.”
Today, rebar futures at Shanghai Futures Exchange lost 1.06 percent and overall sentiment has turned from stable early this week to negative. “The trade war has not ceased, and the US has threatened China with 245 percent tariffs, while China holds back purchases of Boeings… Futures lost one percent amid the CISA’s high output of steel and slow demand,” another Chinese trader noted. In March, China’s crude steel output totaled 92.84 million mt, increasing by 4.6 percent year on year. Moreover, in early April (April 1-10), the average aggregate daily crude steel output of large and medium-sized steel enterprises - all CISA members - increased by 3.4 percent compared to late March.
At the same time, some analysts have also started to believe that the Chinese government may postpone new stimulus measures, considering the rather positive economic data for the first quarter of 2025. In particular, GDP growth was 5.4 percent, exceeding expectations.
Weak sentiments in the local Chinese market have made traders more aggressive. Offers for ex-China billet have been coming to Saudi Arabia at $458-460/mt CFR, versus $463-465/mt CFR earlier in the month. Also, firm offers to Turkey have been at $460-462/mt CFR and market sources agree that prices up to $5/mt lower are easily achievable. There has been a rumour that some short position sales have already been done to Turkey at slightly below $450/mt CFR, but this has not been confirmed by the time of publication and has been assessed as rather low, considering the latest offers. “With scrap falling, I would not be surprised [in $450/mt CFR and below for import billets], but not yet,” a trader said. The indicative price level of duty-free Malaysian billet in Turkey is $485/mt CFR, as mills are inactive in terms of billet export sales, focusing on other products like HRC and wire rod, or having limited allocation.
In Southeast Asia’s import billet market, a deal for ex-China 5SP 150 mm billet was reported at $440/mt CFR early this week, down by $5/mt compared to the level discussed late last week. With freight at $20-25/mt, the FOB price is assessed at slightly below $420/mt. Also, some tonnage of Chinese 3SP billet is heard to have been sold at $435-440/mt CFR Bangkok "to cut rising inventories," a Chinese source said.
The major Indonesian mill has cut its official billet and slab offers by $5/mt today, to $430/mt FOB and $445/mt FOB, respectively. “They were looking for sales to the Middle East, and Turkey, but failed, so they need to adjust,” a Singapore-based trader said.