Prices for ex-China and ex-ASEAN billets have been stable early this week, supported on the one hand by the firm local market in China, and on the other hand by rather stable demand as customers in the GCC have remained interested in imports.
The SteelOrbis reference price for ex-China 3SP billet stands at $470-480/mt FOB, stable from the previous day, and $2.5/mt above the level seen late last week. But while last week most exporters voiced offers on the higher end of this range, today, with some softening of futures prices, there are firm offers at $470/mt FOB. "Steel futures retreated after reaching a peak and now selling pressure has increased, so the market has adjusted slightly. Market fundamentals are still healthy with improved demand, but there is less room for higher prices," a Chinese trader said.
A deal for 50,000 mt of Chinese billet has been done to a buyer in the UAE at $540/mt CFR with shipment to an Omani port. The land transportation costs are high at the moment and can reach $40-45/mt for customers in the GCC, which now do not have access to their own ports due to the closure of the Strait of Hormuz. In addition, market sources report increasing challenges in transportation such as a shortage of trucks, high fees at ports, etc. In any case, as one trader commented, “For buyers in the GCC, there is a lack of options. They need to buy feedstock to sustain their operations.”
Another deal, but this time to Saudi Arabia, is also heard to have been done very recently by a Chinese trader at $535/mt CFR or so, but this information could not be confirmed by the time of publication.
The Indonesian mill has kept its August shipment billet offer stable at $485/mt FOB, but it has adjusted its slab offer down by $5/mt to $540/mt FOB for July shipment.
There has been talk that some additional tonnage of Chinese 5SP billets has been traded to the Philippines at around $500/mt CFR, in addition to the previous sale reported at $497-498/mt CFR last week. But this could not be confirmed by the time of publication, and in general prices have been assessed at stable levels.
