Ex-China reference price for 3SP billet has lost $10/mt today, on September 23, coming to $425-435/mt FOB as concerns about weak Chinese demand have been strong and the government support of local demand has been insufficient to change weak fundamentals.
“I believe $425-430/mt FOB is achievable in negotiations, as we are back where we were in early Sept,” a trader said.
There have been no adjustments in ex-ASEAN billet offers with ex-Indonesia price being at $440/mt FOB on Friday.
The average local billet price in China has lost RMB 45/mt ($6.4/mt) over a day to RMB 2,913/mt ($413/mt) ex-warehouse. The most popular rebar futures have dropped by 3.35 percent at Shanghai Futures Exchange over a day, being the major signal of weak sentiments.
Today, the People's Bank of China (PBoC) injected RMB 74.5 billion into the banking system via 14-day reverse repurchase operations with a rate of 1.85 percent, down by 0.10 percentage points compared to the previous round. Most analysts assess the move as insufficient to support economy and not as major monetary policy easing after FED cut, as usually China used 14-day repos to help the banking system over long holidays [in October 1-7].
Also, iron ore prices have lost $2.2/mt today, coming to $89/mt CFR. Two deals for 170,000 mt 61 percent Pilbara fines each have been closed at $88.5/mt CFR and $88.45/mt CFR, respectively, both for end October-early November laycan. “Iron ore reflects weak steel market and I do not foresee strong replenishment ahead of holidays,” a trader said.
$1 = RMB 7.053
