Prices for Asian billet have posted small increases this week amid steel production cuts in China seen in late July recently announced by CISA and continued support from the cost side. At the same time, deals are still very rare due to the off-season and still low bids.
The SteelOrbis reference price for ex-China billet has posted tiny increase by $2.5/mt on average to $440-455/mt FOB, versus $440-450/mt FOB last week. “We see now similar offers for Chinese and Indonesian billets at $455/mt FOB, but I would say even at $440/mt FOB it would be hard to sell,” a Singapore-based trader said. Sentiments were rather negative on Monday, but offers improved since Tuesday amid steel production cuts confirmed in China in late July and the rebound in coking coal futures amid more talk about mining limitations. “On Monday, we saw some small drop in billet offers by around $5/mt, but they immediately increased yesterday. Buyers were not able to catch up,” a Chinese trader said.
Daily crude steel production in China was announced by the China Iron and Steel Association (CISA) at below 2 million mt in late July (July 21-31), indicating a sharp fall compared to the previous levels, and “a real fight against low-priced competition”, a source said. The average daily production of CISA members totaled 1.982 million mt in late July, down 7.4 percent compared to mid-July.
There have only been a few bookings done by Asian traders lately and they were done last week. About 10,000 mt of Asian 5SP 150 mm billet changed hands at $465/mt CFR Manila (equivalent to around $445/mt FOB) late last week. This level is slightly lower than the previous 5SP offers at $470-477/mt CFR in the Philippines, but it is assessed by market sources as rather high and to be for covering urgent needs, with most buyers bidding at $460/mt CFR at best. “For 3SP, I would say buyers are still not ready to pay anything above $450-455/mt CFR,” a local Southeast Asian source said.
Also, a sale to the MENA region has been heard at $495/mt CFR, but with all extras and freight it is equivalent to $440-445/mt FOB.
An Indonesian mill has announced its October shipment billet offer at $455/mt FOB today, up slightly by $2/mt from the level seen late last week.