Prices for ex-China and ex-ASEAN billets have been stable this week and most factors signal that this trend is likely to continue for the near future, while market sources do not expect further significant price declines in the near term. As a result, negotiations with buyers in Asia and the Middle East have accelerated.
The ex-China billet reference price is stable at $420-425/mt FOB with firm offers mainly at the higher end of the range. “We see lower offer volumes from China [‘s mills] and this is understandable as their production is going down,” a Southeast Asian trader said. “Mills’ profits have kept falling, so overhauls will be bigger in the coming one to two months and liquid iron output will fall much for sure,” a Chinese trader noted.
In Asia, trading is still limited but rumors of fresh sales of ex-China 5SP billets at $440-445/mt CFR to the Philippines have emerged. There has been no confirmation of this by the time of publication, but market sources said that in general offer price levels from traders have been stable at $445/mt CFR, so “this could be reasonable for buyers if they still need to buy for December,” a local source said.
Also, negotiations for Chinese billet by traders have been held in the GCC at $450-455/mt CFR this week, and some buyers may be interested since, after small discounts from the previous price level at $455-457/mt CFR seen over the past few weeks, it is unlikely that there will be any additional discounts. In Turkey, most offers for Chinese billet have been at $462-465/mt CFR and, though no new deals have been reported so far, market sources believe that, with the current slight increase in scrap prices, some mills may consider buying billets, though bids would be not above $460/mt CFR.
An Indonesian mill has managed to sell billets for January shipment at $430/mt FOB, which is stable compared to the previous deals for December shipment, though down from the offer level at $435/mt FOB seen late last week. “This price [$430/mt FOB] is too high for Asia, so it will go somewhere in the Middle East,” a trader commented.
