The Chinese billet market has fallen again today, Thursday, August 8, as some rebound seen early this week has faded away amid poor local demand and the reversal of the currency’s appreciation. ASEAN mills have followed and rolled back the previous price increase. As a result, Southeast Asia’s import market has found a new low this week.
The ex-China 3SP reference price has settled at $450-455/mt FOB today, down by $5/mt from yesterday and down $7.5/mt on average since late last week. “Todays’ price is $450/mt FOB, so traders may keep going short,” a Chinese trader said, explaining that traders are going to achieve prices below this level in the next sales. “Lower numbers make sense, considering Chinese domestic prices and their currency having reversed most of its appreciation,” an international trader said. Today’s PBOC’s middle rate is $1 = RMB 7.146, versus $1 = RMB 7.1386 yesterday.
Official offers from the major Indonesian mill are at $460/mt FOB again today, declining by $5-10/mt from that reported early this week, but stable over the past week. After a deal for 10,000 mt of 3SP done at $458/mt FOB (for Asian market) and another one at $460-465/mt FOB for 4SP last week, negotiations have continued at lower levels with traders first trying to sell on CFR basis, before taking positions on FOB basis. "$458/mt FOB is already too expensive for Dexin’s billet," a trader said. The previous offer of a Malaysian producer at $475/mt FOB is no longer considered workable.
The falling Chinese prices have resulted in a softening in Southeast Asia’s import market. In particular, offers from traders (for mainly Chinese origin, but including those for open origin) to the Philippines have been at $466/mt CFR for 3SP and $471/mt CFR for 5SP, with some sources reporting deals being done, though no details have been disclosed for now. Some offers for 5SP were at $475/mt CFR Manila this morning, while last week the reference deal price to Manila was at $480-485/mt CFR. “The market is so bad. I don’t know if any improvement is possible in August,” a local source said.
In Indonesia, the offer level for 3SP billet has been at $465/mt CFR, down by $5/mt over the past week.
Early this week, ex-Russia billet was traded at $468/mt CFR to Taiwan, while at the moment buyers’ price ideas are at around $460-465/mt CFR.
The reference billet price in Southeast Asia’s import market has fallen by $5-10/mt this week to $465-475/mt CFR.
Though the declines in Chinese and ASEAN prices have already been confirmed, in some distant markets like Turkey and the Middle East traders have not been so aggressive, at least for now.