Ex-China billet prices have slightly declined compared to last week. But, in general, most sellers have not been very aggressive, and the decline has mainly been due to lower production costs after the softening of iron ore prices and the first round of local coke price declines proposed this week.
Ex-China billet reference prices are at $455-465/mt FOB with the lower end of the range losing $5/mt from last week. “The price depends on the exchange rate, but, yes, $455/mt FOB is achievable,” a Chinese trader commented. Announced production cuts and weak local demand have been keeping the allocation of billet for export rather stable, but not high. And the recent appreciation of the local currency is making exports less advantageous (PBOC official rate $1 = RMB 6.7933). Some small billet price reductions have been mainly due only to lower iron ore prices (down $3.2/mt over the week) and the more widely spread first round of coke price decreases by RMB 50-55/mt ($7-8/mt).
The major Indonesian mill has been offering for September shipment at $465/mt FOB, stable from late last week. Though no deals have been reported so far, a level $5/mt lower is assessed as being workable. But the producer has managed to conclude deals for slabs: apart from previously reported sales to India, 30,000 mt of HRC grade slabs have been traded to Italy at $470/mt FOB, while official offers are at $475/mt FOB, also for September shipment.
Even though small discounts are possible on FOB basis, most importers have been receiving rather stable billet offers due to some increase in freight costs. For instance, the lowest Chinese billet offers to the Philippines are still at $480-485/mt CFR and buyers have been trying to find lower levels down to $470/mt CFR.
