Prices for ex-China billet have posted some gradual softening early this week, confirming that the market has entered a slow softening phase after decent increases seen in the earlier part of May after the holidays. The main reason for the declines has been weaker futures prices, triggered by a slowdown of local demand.
The SteelOrbis reference price for ex-China billet has settled at $475-485/mt FOB, down by $5/mt compared to $480-490/mt FOB seen late last week. “We were confident that prices would be at $480/mt FOB and above last week, but, today, after the negative futures performance, I think the tradable level and achievable large-volume offers are below this - at $475-477/mt FOB,” an Asian trading source said.
“The export market is stable and more news has emerged about possible control of semis exports, which might exert pressure on finished steel sales in H2,” a Chinese trader said. But a few other trading companies in Asia said they still see decent volumes available from China and they do not expect strict measures in the near future.
Following some decline in China, a bearish mood has returned to Southeast Asia’s import market. The tradable level for 5SP 150 mm billet in the Philippines has been assessed at not above $500-505/mt CFR. “Even $500/mt CFR [for 150 mm billets] will be high for buyers in such conditions,” one local source added. Buyers in Thailand have again started to look for $490/mt CFR, but offers are at $500-505/mt CFR, down slightly from $505/mt CFR last week.
The Indonesian mill has been inactive after the previous sale at $490/mt FOB to a trader for the GCC market. “They have good order books, so for their September sales we will wait for some weeks for sure,” a source commented.
