More deals for ex-China billet have been disclosed lately, even though prices have not changed much since last week, when export activity has accelerated. Even though some traders and mills in China claim that they refuse to go further down and even trying to voice higher offers, most market sources agree that without big production cuts, the ex-China billet sales will be sustained for the near future with no hopes for local demand improvement.
Following a deal for 30,000 mt of ex-China 5SP billet at $505/mt CFR Manila late last week, which translates to $480-485/mt FOB, another contract for SE Asia for at least 20,000 mt has been heard at $480/mt FOB. Also, at least two sources said that they heard 3SP billet sale at $475/mt FOB, which, however, couldn’t be confirmed by the time of publication. “Ex-China billet prices at $480/mt FOB base are available for sure. Haven’t heard about $475/mt FOB deal but I’m not surprised… Sentiment in SE Asia is negative and I don’t see many reasons for any improvement in next 6-8 weeks due to hot and rainy weather in many Asian countries,” one of the big international trader commented.
In addition, there has been talks about Chinese traders’ sale of 50,000 mt of ex-China 150mm billet at $485/mt FOB for Turkey. This information couldn’t be confirmed from the buyers’ side due to the holidays in the country. Market sources said that this FOB price should translate to $520-525/mt CFR, which is below the previous deals for ex-Asia origin at $528-532/mt CFR. However, “I think it is risky [to buy for a trader] 50,000 mt, even if it is July [shipment], so price seems high,” a major Chinese trader said, adding that he sees the market as mainly stable at $480-490/mt FOB now.
Some sellers, offering Chinese origin billet increased 3SP billet offers from $480-485/mt FOB to $490/mt FOB on Tuesday this week, following some slight rebound in futures and iron ore. Nevertheless, “they are mostly testing, I am not considering this as rebound, unfortunately, the [local] market will remain struggling,” another large Chinese trader said.
The SteelOrbis reference price for ex-China billet has remained stable at $480-490/mt FOB. “China will most probably remain aggressive unless there's some policy intervention,” a Singapore-based source said.
At the same time, ex-Indonesia billet price has been stable at $495/mt FOB. The latest sale was reported to Latin America at this level, as SteelOrbis published last week. However, this week a few sources said that the Indonesian mill has managed to push in total up to 100,000 mt of semis, and some market sources believe that at least 50,000 mt of this volume could be slabs to the same region, offered at $500/mt FOB last week. “We all heard a sale at $495/mt FOB for Dexin billet [to Latina America], it could be half true if they sold both billet and slabs at this level on average. So, the real billet price would be $490/mt FOB,” an Asian source shared his view.
In addition, ex-Vietnam BF 3SP 1500 mm billet has been on offer at $492/mt FOB for August shipment, down from $495-500/mt FOB last week. And one more trader said that this level is more reasonable than ex-Indonesia offer under current conditions as bids from SE Asian importers are all below $490/mt FOB.