Ex-China billet prices have fallen again today, on May 24, following declines seen in the local and futures prices. Most market sources believe that demand for construction steel will keep worsening by the end of May and in June due to rains, no visible support from the government to the real estate and limited production cuts.
The reference price for ex-China 3SP billet has slipped to $490-500/mt FOB, down by $15/mt from yesterday’s level and down by $30/mt since late last week. “Many sellers didn’t have transactions [in the export market in China] for a long time. Now the local market looks not promising at all, so I don’t see other option for prices but to go down,” a Chinese trader commented.
With the freight to Southeast Asia at $20-25/mt, the current FOB prices from China translate to $510-525/mt CFR. However, market sources said that most traders are pessimistic and will keep offering in short positions at lower level with the $505/mt CFR Manila already been on the table, according to market sources. The latest reference import billet price in SE Asia was at $510-525/mt CFR just yesterday, but todays’ level has been assessed at $505-520/mt CFR as the highest.
In the distant markets, like Turkey, the latest offers from China have been reported at $530-540/mt CFR, significantly lower than last week at $550/mt CFR. Moreover, some market sources believe that even lower levels around $520/mt CFR Turkey could be achieved by customers for sizable lots from traders, who may offer in a short position, waiting for further drop in mills’ prices in short term.
