The sentiment in the Chinese billet market has worsened early this week with futures falling for two days in a row. Though some sellers have been trying to keep export prices stable, the rare deals rumored in the market have been heard at lower levels, signaling that traders’ confidence in a possible uptrend in Asia is fading away.
The SteelOrbis reference price for ex-China billet stands at $430-440/mt FOB at the moment, slightly down from $435-440/mt FOB seen late last week. Mills in China are trying to keep prices firm even though futures prices are dropping. In fact, the FOB price is at around $435-440/mt FOB,” a Singapore-based trader said. Two other traders in the Asian market have said that they see the tradable levels at $430-435/mt FOB from China, though most offers are closer to $440/mt FOB. There has been a rumor about a trader taking a position for ex-China billet at around $435/mt FOB on Monday, but this could not be confirmed by the time of publication.
Steel futures have been going down due to weak demand and expectations for the near future. In particular, the new area covered by construction activity in China decreased by 28.9 percent year on year in January-February 2025, while the pace of the decline was 23 percent in 2024.
There have been rumors about two deals for ex-China billets to the Middle East, but none of them has been confirmed. One contract is heard to have been done by a trader at $470-472/mt CFR to Saudi Arabia, but a few major importers have denied this information. Also, a large cargo of 50,000 mt of ex-China billet is rumored to have been sold to Turkey at $465/mt CFR, but most sources polled by SteelOrbis agree that the price is unrealistically low, considering the previous offers at not below $480/mt CFR.
At the same time, the major Indonesian mill has increased May shipment offers for billet by $10/mt to $455/mt FOB as market sources believe the mill is not aggressive in pushing large volumes with a part of its May allocation already sold out. Also, ex-Indonesia slab offers have added another $10/mt to $475/mt FOB, following the previous rise by $25/mt. “They target more sales to Europe, so slab, wire rod and HRC prices are on the rise,” a source said. After the previous slab sales, the producer has started to offer for June shipment.
Also, ex-Indonesia wire rod offers are for June at $490-495/mt FOB, up by $20/mt over the past fortnight.