Ex-China billet prices have not changed since last week since, even though futures prices declined yesterday, June 9, following the expected rise in coal supply, today they improved, based on rather positive steel export data. This again proves that the Chinese billet market is sentiment-driven, while the overall outlook for June is still not positive given the slowdown of demand in China.
The ex-China billet reference price has remained stable at $470-475/mt FOB. Most offers have been heard at $475/mt FOB or just a few dollars below, but most bids from buyers in Southeast Asia have been at $465/mt FOB, sources have confirmed. “I would say $470-475/mt FOB is a fair price for Chinese billet today. The gap with Asian buyers [ideas] persists,” a Chinese trader said.
There have been no new deals reported for Chinese billet in Southeast Asia, but the tradable level has been assessed at $490-495/mt CFR (for both 3SP and 5SP), which translates to $470/mt FOB or a few dollars lower depending on freight. The latest sales of Russian billet to Taiwan have been confirmed at $495/mt CFR. “This is the base price, and Chinese prices are not lower,” a trading source said.
Chinese exporters have faced rather limited demand from the GCC after buyers in this destination replenished stocks with Indian billet. A few customers have reported that they do not see delays or possible disruptions of their shipments from India even after the news about the accident at RINL’s plant. Most of the recently purchased volumes are for shipment from mid-June and in July.
Negotiations for ex-China billet in Turkey have been reported at $525-530/mt CFR for August shipment, and some interest has been seen at the lower end of the range as there has been a lack of firm supply from other major sellers. The price translates to $472-475/mt FOB depending on freight and proves that the market has stabilized for some time.
“It is possible for China [billet] to go below $470/mt FOB, but no one know when it will happen,” another Chinese trader said.
The offer level for October shipment from the Indonesian mill has remained at $485/mt FOB since there is no allocation for closer shipment and basically the producer is staying out of the market. But the seller still has slabs and wire rods for August shipment, so this week it cut offers for both these products by $5/mt to $510/mt FOB and $505/mt FOB, respectively.
