Chinese billet export prices have shown some signs of bottoming up since, after falling as low as $420-425/mt FOB on Monday, offers have inched up today. There are just tentative signs of an end of the downtrend, while there are doubts that any sizable rebound is possible soon, but this is positive news after weeks of declines. ASEAN region-based mills have had to cut export offers slightly compared to last week, but they have remained less competitive.
Ex-China 3SP reference prices hit their lowest level of $420-435/mt FOB on Monday and a few sales and negotiations were reported at the lower end of the range. However, on Tuesday, August 20, prices have returned to the $430-435/mt FOB levels seen on Friday.
“Steel futures are up roughly two percent and more mills’ restriction of production may help to support the present rate,” a Chinese trader said. However, since there are doubts that demand will improve even slightly in the coming weeks, billet prices may fluctuate at a low level. China’s government left the benchmark lending rates unchanged today and steel demand inside China has shown no significant signals it will increase, even though “silver” September is approaching.
Chinese billet has been the most competitive in all major sales destinations. In particular, last week 20,000 mt of ex-China 3SP 150 mm billet were sold to Indonesia at $438/mt CFR, being the lowest level so far, dropping below the previous lowest indication of $447/mt CFR. This sales price translates to nearly $421-422/mt on FOB basis. Also, ex-China 5SP has been on offer at $455/mt CFR in Manila, down by $5-10/mt from offers for open origin seen early last week.
Also, the latest deal for 50,000 mt of ex-China billet to Turkey has been widely discussed at $465/mt CFR Izmir.
At the same time, the ex-Indonesia billet price has settled at $440/mt FOB early this week, down from $445-450/mt FOB offered by the leading Indonesian mill and considered as workable by traders last week. “Yes, the current price is $440/mt FOB, but, even if some discounts on this level are possible, it is hard to sell,” a Singapore-based trader said. One of the Malaysian mills has been indicating a price at $455/mt FOB or so.