The Chinese steel market has reacted strongly to the weaker-than-expected spendings announced by the NDRC at its press conference yesterday. Steel and iron ore futures all dropped by over three percent today, October 9, resulting in steel export prices also retreating, with billet prices dropping by $10/mt on the day.
The new reference price for ex-China 3SP billet is $470-480/mt FOB, down by $10/mt compared to the level announced on September 30, the last day before the long holiday. Though yesterday, mills’ targets were heard at $500-505/mt FOB, at the moment there are more firm offers at the level of $480/mt FOB. “I think depending on destination some $5-7/mt discounts are possible,” a Singapore-based trader said.
Export prices have been adjusted down after rebar at Shanghai Futures Exchange lost 3.29 percent today. As reported yesterday, the NDRC announced RMB 100 billion (US$14.1 billion) to be issued in advance from the 2025 central budget and it will prepare the list of the major construction projects to be developed using these spendings. However, this has been assessed as “insufficient support” compared to the expectations of many major analysts for support amounting to trillions in the local cu.
The indicative price for ex-Indonesia billet has settled at $490-500/mt FOB for now. Yesterday, the mill’s target price was at $500/mt FOB. Some market sources believe that $490/mt FOB would be achievable, but this is not an official level. “Dexin is not dropping its offer price as their order book is already full until the end of January,” a large trader said.
In Southeast Asia, Chinese billet offers are at $500/mt CFR for 3SP and $505/mt CFR for 5SP, but buyers are waiting for lower prices to restart negotiations.
Latest offers for ex-China 3SP billet to Taiwan have been at $495/mt CFR, still far higher than deals in the previous round of bookings done at $445-450/mt CFR in the middle of September. An offer from the mill in Russia’s Far East region to Taiwan has been reported at $490/mt CFR, while ex-ASEAN offers have been rare and not competitive.
