Major Chinese billet exporters have kept offer prices for billet unchanged this week after the rises seen last week, following the rebound in futures prices, but the Indonesian mill has corrected its offer down slightly, signaling a weakening of sentiments again. Chinese suppliers have not been adjusting prices to the international market mainly due to production reductions and rising raw material prices, though limited demand and some downside movements in steel futures in China over the last two days have impacted the mood this week.
The ex-China billet reference price stands at $430-435/mt FOB, with most offers still at the higher end of the range. “The major problem is demand [in the local market] and it is not resolved, so even the latest production cuts can’t support the market. I don’t see the market as very negative, but there are also no reasons to grow,” an international trader said. One of Chinese traders noted, “The market logic is the same - the seasonal demand is pretty slow. Daily rebar trading is around 85,000 mt [versus usually near 100,000 mt], most local prices are stable.” One of the important reasons for steel prices from China in the export market not moving down after the recent rebound is the increase seen in raw materials. In particular, iron ore fines have come closer to the $100/mt CFR mark. Also, coke plants are in negotiations for local coke prices to increase by RMB 70-90/mt.
There has been a rumor about negotiations for ex-China billet in the Philippines at $450/mt CFR, but a number of market sources said that the price is too high for most buyers and most bids for 5SP 150 mm billets are at $435-440/mt CFR. “It could be only for a very small volume for 130 mm [which is more popular and less in terms of offered volumes]. But even in this case, this is an exception,” a Singapore-based trader said.
The ex-Indonesia billet price has been corrected down by $5/mt from late last week to $435/mt FOB for October shipment, but there has still been no information about new deals.
