Prices for ex-China billet have remained stable over the past week and some traders have been voicing offers even at a few dollars higher even though the mood in Asia has been rather negative due to declining demand ahead of the holidays and the recent slide in futures prices.
The ex-China billet reference price is stable at $435-440/mt FOB. Most offers are still at the higher end of the range, even though rebar futures at Shanghai Futures Exchange lost 1.56 percent on Monday and an additional 0.51 percent today. “The export price is firm due to the exchange rate and allocation is lesser now,” a Chinese trader noted. Some mills have started to lower production in advance ahead of the Chinese New Year holiday, which resulted in some decline in allocation of billets for the export market. Moreover, the yuan has appreciated with the mid-point exchange rate of the PBOC at $1 = RMB 6.9608 on February 3. “I don’t hear many bookings because China’s prices are still quite high. Mills’ FOB offers are even above $440/mt now,” a Singapore-based trader said.
In the Philippines, offers for 5SP billet have been heard at $460-470/mt CFR, which is up from $455-460/mt CFR last week. Some buyers are still looking for $450-455/mt CFR, but there have been no discounts at all, unlike even in the previous week. An offer for ex-Japan billet has also been close to $460/mt CFR. Offers for 3SP billet from China in Southeast Asia have been not below $460/mt CFR, and sellers even rejected bids at $458/mt CFR, which have been heard from Taiwan. “The strong yuan is pushing prices now. I don’t think we will be lower [offer] by the Chinese New Year,” a Manila-based source said.
An Indonesian mill has kept its billet offers stable at $455/mt FOB and increased its slab offer by another $5/mt to $470/mt FOB. “Dexin’s offers are too high and the lead time is stretched, so prices from Indonesia don’t matter,” a trader in Singapore said.
