Prices for ex-Indonesia billet have gained a bit more since late last week after sizable sales and the rebound today, July 29, in Chinese futures after the decline seen a day earlier. The overall outlook for the Chinese market is rather stable, as market players do not believe in a further significant rebound, considering the weak seasonal demand.
An offer for billet from the Malaysian mill stands at $457/mt FOB today, up from $453/mt FOB on Friday. “The offer is back up to $457/mt FOB as China’s futures went up today and they [Indonesian producer] sold quite a bit between $450-453/mt,” a Singapore-based trader said.
The Vietnamese mill has been not offering any billets to the export market after a sale at $455/mt FOB last week, according to market sources.
After Chinese billet offers retreated on Monday, today the reference export price from China has improved a little (by $2.5/mt on average from yesterday) to $445-455/mt FOB. “I don’t think that prices may rise much further from the current level as demand is weak and, with hot weather and typhoons, August will be weak in terms of demand,” a Chinese trader said. The current price is down by $5/mt on average from late last week.
However, no further correction is expected for billet prices either, considering the still strong cost push. Chinese mills accepted the second and third rounds of local coke price increases last week, and the fourth round has already been proposed, but not accepted.
After the sharp rises seen for coking coal futures last week, they have been retreating for two days in a row this week, signaling that the hikes were too sharp. Nevertheless, as local coking coal mines will have restrictions this year, it is unlikely that spot prices will see any significant drop in the near future.
Apart from Chinese and ASEAN billet exporters, this week Japanese suppliers have also started to voice offers - a lot of 5SP billet has been available to Manila at $470/mt CFR. But the market sources said that buyers still see the acceptable levels at not above $450-455/mt CFR.