Ex-ASEAN billet prices have not improved over the past week even though Chinese futures prices have been on the rise since the middle of last week. Moreover, some deals have been done at a lower level, reflecting buyers’ low bids and the still competitive Chinese export offers.
Ex-Indonesia billet reference prices have come down by $5/mt over the past week to $495-500/mt FOB. While official offers are still at $500/mt FOB for 3SP, a number of large traders said that the real market price is already at $495/mt FOB. “Dexin is not really giving official offers, but I see some softening. They are indicating around $495/mt FOB for firm bids this morning,” a Singapore-based trader said. A few deals for 20,000-30,000 mt have been heard at this level recently, though the sales destination has not been confirmed by the time of publication. Some market sources believe that, since the traded material was 3SP, it may go to India instead of Southeast Asia. However, bids from India have been heard at $520/mt CFR maximum, which leaves very limited space for traders to maneuver.
At the same time, the ex-China 3SP reference price has been settled by SteelOrbis at $490-500/mt FOB, up by $5/mt on average since late last week, mainly amid higher futures and raw material costs rather than demand. “Chinese prices are still a bit better than Indonesia, I think, so not much interest [among Chinese traders in buying ex-ASEAN billet],” a Shanghai-based source said.
In Taiwan, Indonesia and Thailand, where 3SP 150 mm billet is the most popular, bids have been at $490-500/mt CFR, while offers for Russian, Iranian and Chinese origins have been mainly at $505-515/mt CFR. "Taiwan is quite slow. I have not heard of any transactions since they came back from the holidays," a trader said.
Average Chinese billet spot prices are at RMB 3,465/mt ex-warehouse on October 17, just up RMB 2/mt from October 10. This price translates to $427/mt, excluding 13 percent VAT. Rebar futures at Shanghai futures Exchange have posted a small increase today, by 0.61 percent, after gaining 1.05 percent yesterday.
