There has still been no settled trend in the Asian export billet market in the past week, with Chinese sellers holding prices rather stable and some ASEAN region-based mills attempting to increase offers, while some ex-Russia discounted deals were also observed.
The ex-China billet reference price has remained stable at $430-440/mt FOB. “It is hard to sell something now, even with offers at $435/mt FOB,” one of the Chinese traders said, adding that bids are from rare to non-existent. “The September market can be described as neutral. Some restocking might happen ahead of the October holiday, but volume is expected to be limited,” another Chinese trading source said.
At the same time, Chinese 5SP billet offers have increased to $460/mt CFR Manila, versus last week’s range of $455-458/mt CFR (the lower end was for 150 mm and the higher end for 130 mm). Market sources said that some traders have been preparing for better market conditions in China by the end of the month and, since prices of some raw materials like iron ore have been moving up and giving cost support to mills, the market has to move up some day. Iron ore with 62 percent Fe content reached $106.55/mt CFR yesterday, the highest since late February. This happened after news that the Guinean government has asked Rio Tinto and Baowu to establish local processing plants for the Simandou iron ore project instead of the previously planned fully export-oriented iron ore plan. This will potentially postpone the start-up of the 120 million mt per annum project previously expected to start operations late this year. Also, it will entail additional investment expenses.
At the same time, one of the Russian mills has said sold a cargo of 26,000 mt of 125 mm billet at $432/mt FOB Far East ports of Russia. The material will go to the Philippines, some market sources believe. But “That's quite uncommon. FOB sales for Russian origin are a bit tricky because getting the LPSR [Load port survey report] is not straightforward,” a Singapore-based source said. With the freight, this price translates to around $455-457/mt on CFR basis, according to market participants.
The Indonesian mill has increased its offer for billet for November shipment to $450/mt FOB, from the previous levels of $445-447/mt FOB seen last week. “Dexin is super slow in billet sales. They are just doing HRC trading now,” a trader said. But also, the producer managed to sign a few small-volume delas for slabs to Thailand and Indonesia at around $440-445/mt FOB. After that, it increased offers for slabs to $450/mt FOB and started to offer for December shipment.