Prices for Chinese billet have increased on March 9, following some improvement in prices locally, while ASEAN mills are even more bullish on prices. But there is confusion in most major import markets as final prices on CFR basis for customers will have to rise even more, considering the sharp volatility of freight rates.
The SteelOrbis reference price for ex-China 3SP billet stands at $450-455/mt FOB, adding $5/mt from the previous trading day. The main reason is the stronger support from the local market, where the average billet price is up by RMB 35/mt ($5/mt) today to RMB 3,000/mt ($435/mt) ex-warehouse. “With strong cost support and spring expectations, the local Chinese steel market is performing better... Shortage of oil had pushed up the price of coke, so then it can spread to other commodities easily. The steel market will have to follow in such a situation,” a Chinese trader noted.
There has been information that in addition to a deal for Chinese 3SP 150 mm billet at $460-465/mt CFR Thailand last week, one more deal for 30,000 mt of 5SP 150 mm billet was done to the Philippines at just slightly below $470/mt CFR. But market sources said that at the moment freight from China to Manila can be at $32-35/mt, bringing the FOB level to below $440/mt. Market sources said that traders hope freight rates will return back to $25/mt levels at the highest by May when delivery is expected.
The leading Indonesian mill has again announced a price hike - by $10/mt compared to Friday to $480/mt FOB. This follows a $15/mt jump already seen from the producer last week. “Though they claim in the list [prices] it is for April shipment, I think they will fully rely on the local market. This price says they don’t want to sell somewhere else,” an Asian trader commented.
