The week has started with the drop in ex-China billet prices due to futures weakening, week finished steel demand because of the rainy weather in China and still high steel output. However, after Monday’s fall, steel futures have rebounded on Tuesday, signaling that the downtrend will unlikely to persist, at least in the near future, SteelOrbis learned from the market on June 27.
Ex-China billet reference price declined from $510-530/mt FOB late last week to $500-510/mt FOB on Monday. “Offers at $500/mt FOB were from many suppliers yesterday,” a trader said. “..but today futures are up again, so not sure how many of those offers are still valid,” another trading source commented. “We expect rebound, I would say now prices are $505/mt FOB as the lowest,” a Chinese source said.
Ex-ASEAN mills are not in a hurry to cut official offers since they are mostly sold out for July, first half of August shipment. Official offers from Dexin have remained at $525/mt FOB and no new deals have been reported after a few sales at $520/mt FOB last week.
Softening of prices in China early this week has triggered the downward trend in SE Asia. The reference price for imported billet has softened by $5/mt on average since last week to $520/mt CFR. Firm offers for open origin EAF/BF 5SP billet from traders have been reported at $525/mt CFR Manila, while IF billet could be booked at $515/mt CFR Manila with some negotiations ongoing. “Prices are definitely down, but insufficient for buyers for now,” a Manila-based importer said.
The average local billet price in China lost RMB 50/mt ($7/mt) on Monday from Friday, while rebounded by RMB 30/mt ($4/mt), settling at RMB 3,540/mt ex-warehouse on Tuesday.
A number of Chinese traders have shared concerns that RMB will continue depreciating over a short period and FOB billet prices may fluctuate at lower than earlier range. “Besides, Chinese domestic demand for steel appears much worse during 2023 fall season. Though today’s rebar future index bounced, which means that in general, the market will move sideways for some days,” a Chinese source said.