Today, futures in China have fallen visibly and pulled down local and export prices from China, bringing Asian billet offers down compared to the highs seen last week and early this week. Nevertheless, the SE Asian import market has remained almost halted as bid-offers mismatch has persisted.
The SteelOrbis reference price for ex-China billet has been lowered by $10/mt over the week to $440-450/mt FOB. “A significant fall happened today due to soft PMI in July and no concrete support in demand end. Coking coal is the trigger this time again as after rising for 6 days by maximum limit, today they fell by maximum limit,” a Chinese trader noted. Though Chinese steel PMI started at over 50 percent in July, the general PMI was at just 49.3 percent, down from 49.7 percent in June, reflecting weak economic conditions. Coking coal September futures at Dalian Commodity Exchange dropped by 8 percent today, which has been said to be “a normal correction after too sharp jump,” one trader said. Local billet prices in China have fallen by RMB 53/mt ($7/mt) on average, while the drop was RMB 70/mt ($10/mt) in Tangshan.
At the same time, the major Indonesian billet exporter has announced its offer at $453/mt FOB, down by $4/mt seen on Tuesday, but stable from last Friday. Market sources believe that $450/mt FOB is achievable.
In the SE Asian import billet market, offers for 5SP billet have moved up to $470-477/mt CFR early this week, but they softened a bit by Thursday. Japanese 5SP 130 mm billet lot offered since late last week at $470/mt CFR Manila is still unsold, sources said, but “this can be good option for someone in need of 130 mm billet,” an international trader said. Some lower offers at $465/mt CFR have been seen in the Philippines for Chinese 5SP 1500 mm billet. The lowest offers for 3SP billet in SE Asia have been at $460-470/mt CFR this week. But most market sources agree that bids are still not above $450-455/mt CFR for 3SP and $460/mt CFR as the highest for 5SP, making the trading almost halted. The reference price for import billet in SE Asia has settled at $450-470/mt CFR this week, up by $5/mt on average since last week.
$1 = RMB 7.1494
