Prices for ex-China billet have declined again early this week and remain the most competitive in Asia. Nevertheless, after a number of deals, trading is not currently active as traders and end-users have also cut bids, trying to understand how far prices are from the bottom. ASEAN region-based mills have not updated their billet offers since last week, though most market sources are sure than in the next deals they will have to accept lower levels.
The ex-China reference price for 3SP billet stands at $470-475/mt FOB, stable compared to the previous day due to the limited change in futures prices, but down $7.5/mt on average since late last week. Most offers have been reported at $475/mt FOB, but “no further deals as buyers bid lower. But I think now traders and mills will not accept [much below the current offers],” a large Chinese trader said, adding that at the moment the price should be close to the bottom and that the situation may change only if raw material prices decline further.
Ex-ASEAN billet prices have remained at $490/mt FOB, in line with the deal for ex-Indonesia billet reported last week. However, “so far they have not released new prices, telling traders to work at $490/mt FOB, so no deals have been heard this week yet,” a Singapore-based trader said. Another major Chinese trader said that Dexin is trying to conclude deals at $485/mt FOB, so some negotiations are possible on a firm bid. Ex-Vietnam offers have been heard at $490/mt FOB too, almost similar to last week.
As a result, ex-China billet prices are still the most competitive in Southeast Asia’s import market. Offers for Chinese Q235/3SP billet to Indonesia and Thailand are at $490-500/mt CFR, with the lower level translating mainly to short position offers. “China’s billets are offered at around $500/mt CFR levels to Indonesia. This is cheaper than Dexin, so in some time we should see deals,” another international trader in Asia said. Also, offers for open origin have been heard to the Philippines at $500/mt CFR, down from the previous deal at $505/mt CFR for 30,000 mt of Chinese 5SP billet.
Other billet suppliers have to follow the downtrend if they want to attract customers. For instance, offers for ex-Iran billet in Thailand have been at $503-505/mt CFR, almost stable since last week and thought to be out of the range of buyers' interest. “We have slightly below $500/mt CFR from China on the table,” an Indonesian importer commented. Also, some ex-Bahrain offers have been heard at $505-510/mt CFR to Indonesia.
At the same time, a mill in Russia’s Far East region has decided to cut offers to push deals, so sizable lots for August shipment have changed hands at $495/mt CFR or slightly lower and “this price should still be workable today,” a source said.